Energy and food are putting pressure on the budgets of many Germans, but consumer sentiment is still robust. However, according to GfK, it is still too early to speak of a trend reversal.
Despite high inflation and concerns about the energy supply, consumer sentiment in Germany remained stable in October. The income expectations of consumers and their inclination to make larger purchases even increased slightly, as reported by the market research company GfK in Nuremberg. In contrast, households’ economic expectations fell. “The mood has calmed down a bit again,” explained GfK consumer researcher Rolf Bürkl. GfK therefore expects a better consumer climate for November than in October. The corresponding value increases from minus 42.8 points to minus 41.9 points.
Bürkl warned: “It is certainly too early to speak of a trend reversal at the moment. The situation in terms of consumer sentiment remains very tense.” In view of the high inflation and concerns about the energy supply, it remains to be seen whether the current stabilization will last or whether a further deterioration of the situation is to be feared in view of the coming winter.
The income expectations determined by GfK recovered slightly – but the value had also reached an all-time record low in September. Bürkl emphasized that the all-clear could not be given. “Explosive energy and food prices reduce the purchasing power of private household incomes and ensure that income pessimism persists.” And according to the forecasts available so far, inflation should also remain high in the coming year.
The propensity to buy also increased slightly. However, it is still significantly lower than during the corona lockdowns in the past two years, as Bürkl emphasized. Households would have to assume that they would have to spend significantly more money on heating in the future. “This money is missing for other purchases.”
Economic expectations worsened: “Consumers are assuming that Germany will slide into a recession,” said Bürkl. He referred to experts’ estimates that gross domestic product will fall by around half a percent in 2023.
For its representative studies on the consumer climate, GfK conducts monthly interviews with consumers about their economic expectations, their income expectations and their propensity to buy. For the current survey, around 2000 people were interviewed from October 6th to 17th. Consumption is an important pillar of economic development in Germany.
