Consumer sentiment improved slightly in Germany, France and Italy, the three main economies of the European Union, but consumers remain cautious in a challenging economic environment.
In December, German consumer sentiment is expected to rise by 1.7 points to -40.2 points from -41.9 points in November, according to the market research firm GfK. “Consumers’ long-standing fear of skyrocketing energy prices has currently eased somewhat, which is having a slightly positive impact on consumer sentiment. On the one hand, some energy prices have recently recovered a bit, and on the other hand, consumers apparently assume that the measures adopted to cap energy prices can help curb inflation, even if this may turn out to be rather modest,” explained GfK’s consumer expert, Rolf Bürkl. “Despite the slight improvements, however, the situation remains tense,” he added.
After a record low in September, income expectations among German consumers increased moderately in November for the second time in a row. The indicator gained 6.2 points month-on-month, rising to -54.3 points. Compared with the corresponding period of the previous year, the decrease still amounts to more than 67 points. Meanwhile, the propensity to buy fell by 1.1 points to -18.6 points in November. This represents a decrease of 28,3 points compared to November 2021. The economic outlook of consumers in Germany gained 4.3 points in November to a total of -17.9 points. “Despite this improvement, the indicator’s level remains very low,” GfK commented. “Consumers expect that a recession will be unavoidable in the near future, thus agreeing with economic experts, who also expect gross domestic product to shrink by around half a percent next year. Private consumption will also be unable to have a positive impact in 2023,” it added.
In France, household confidence rose by one point in November to 83 after rising by two points in October. Nevertheless, the statistics office Insee indicated that the indicator still remains below its long-term average of 100.
Consumer confidence in Italy in November increased to 98.1 from 90.1 in October, while business confidence rose to 106.4 from 104.7 the previous month, according to data released by the statistical institute Istat. In consumer confidence, the economic and future climate components posted the most marked gains, surging to 95.2 from 77.6 and to 102.8 from 88.8, respectively. The personal and current climate components reported more limited increases, rising to 99.0 from 94.3 and to 94.9 from 91.0, respectively. Business confidence improved in all sectors except construction. In the manufacturing industry, Italian business confidence rose to 102.5 from 100.7, while in retail trade, it grew to 112.2 from 109.0. In manufacturing, assessments on demand worsened, and inventories of finished goods are seen increasing. On the other hand, expectations for production showed a marked improvement. In retail trade, views of current business activity worsened slightly, although sales expectations improved significantly. Inventories were considered to be substantially stable.
