A downward trend in consumer sentiment in Germany, which has been ongoing for several months, has persisted in October, according to Handelsverband Deutschland‘s (HDE) latest consumer barometer.
Compared to the previous month, the index has fallen for the fourth month in a row, indicating that as the year draws to a close, there will probably be no growth stimulus from private consumption.
‘Minimal increase in consumption’
Since consumers’ propensity to buy is increasing compared to the previous month, a minimal increase in consumption is to be expected in the coming weeks and months, HDE noted, however, this is coupled with consumers also planning to save more. As a result, a ‘positive impulse for overall economic growth is not to be expected’.
Less optimistic economic forecasts are also reflected in the outlook of consumers, who ‘share the pessimism’ of economic experts, HDE noted.
Compared to the previous month, German consumers’ economic expectations declined in October, making them more pessimistic than a year ago. Consumers are also not very optimistic about the future development of their own income; here too expectations are also falling.
A year of GDP decline
According to HDE, an economic recovery is no longer expected this year – rather, another year of GDP decline is more likely, as consumption will not increase noticeably in the coming months and will therefore no longer be a driver of overall economic growth.
The HDE consumer barometer is based on a monthly survey of 1,600 people on their propensity to buy, their propensity to save, their financial situation and other consumption-related factors. Produced by the Handelsblatt Research Institute (HRI) on behalf of the HDE, it serves as an indicator for private consumption. It does not reflect current consumer behavior, but rather the expected mood in the next three months. Learn more here.
