Consumer sentiment ‘brightened slightly’ in Germany in April, however overall sentiment remains low’, the latest HDE Consumer Barometer has found.
According to the HDE, while consumer sentiment showed a slight month-on-month increase in April, it remains roughly in line with the same level as a year ago.
‘The federal government’s decisions on major investment packages in infrastructure and defence have thus far failed to spark a sense of optimism among consumers,’ it noted. ‘A noticeable recovery in consumption is unlikely for the foreseeable future.’
Despite the outcome of the recent federal election, consumer sentiment remains subdued, the data showed, and with plans to form a government still ongoing at the time the survey was taken, many consumers are adopting a ‘wait-and-see approach’.
Willingness to spend
April did see a modest rise in willingness to spend, however this is still below the level recorded for the same month a year ago.
‘Thus, the upward trend is moving in very small steps. A more significant recovery in private consumption is not expected in the foreseeable future,’ the HDE said.
The HDE Consumer Barometer, published monthly by the Handelsblatt Research Institute on behalf of the HDE, is based on surveys of 1,600 individuals. It measures expectations around purchasing behavior, savings, and personal financial situations. It does not reflect current consumer behavior, but rather the expected mood for the next three months.
‘Positive aspects’
Elsewhere, the HDE said that it sees ‘positive aspects, but also some gaps’ in the coalition agreement between the CDU/CSU and SPD.
‘The industry particularly welcomes the reduction in electricity tax, important steps toward reducing bureaucracy, the introduction of a maximum weekly working time, and the clear commitment to trust-based working hours without time recording,’ it noted. ‘However, the retail sector misses the decisive promotion of city center locations and a clear commitment to collective bargaining autonomy, especially when setting the minimum wage.’ Read more here and here.
