In view of rising energy costs, Germans are saving more money than they have in eleven years. At the same time, this pushes consumer sentiment to a new record low. The approaching winter could exacerbate the situation. There is also fear of a recession in the boardrooms of many companies.
The energy crisis and inflation in Germany are pushing consumer sentiment to a record low. The barometer of the GfK market researchers in Nuremberg signals a surprisingly sharp drop of 5.6 points to minus 36.5 points for September. It falls for the third time in a row, as GfK announced. Since the consumer mood survey for Germany as a whole began in 1991, no worse value has been measured. “The sharp increase in the propensity to save this month has allowed the consumer climate to continue its steep descent. It has again reached a new record low,” said GfK consumer expert Rolf Bürkl.
The Germans’ propensity to save is higher than it has been since July 2011. “The fear of significantly higher energy costs in the coming months is forcing many households to take precautions and put money aside for future energy bills,” says Bürkl. This puts a further strain on the consumer climate, since less money is available for other consumption or purchases.
In addition, the situation could worsen in the coming weeks and months if the supply of fuels and especially gas is not sufficient in the upcoming heating period. “This would lead to a further increase in prices and additionally drive up heating bills.” After two declines in a row, the GfK partial barometer for the economy stabilized and increased minimally. “Despite the slight improvement this month, the risk of recession remains high from the point of view of German consumers,” emphasized the market researchers.
Many companies are currently very worried about the development of energy prices, which have recently exploded. The companies are also unsure whether they will be able to get enough energy at all in the coming winter. Due to the ongoing supply bottlenecks, there is a risk of production restrictions. “This would make a recession more likely.” The mood in the executive floors of the German economy deteriorated slightly again in August. This is indicated by the Ifo business climate index, which has fallen for the third month in a row and thus slipped to its lowest level since June 2020.
