In its latest consumer survey for Germany, GfK has identified more cautious behavior among German consumers. Both economic and income expectations show moderate declines – caused by a noticeable increase in prices and inflation and by once again rising Covid-19 infection rates. However, the propensity to buy is likely to increase slightly. GfK thus forecasts a -0.3-point change in the consumer climate for August, the same value as in July this year. Compared with July 2020, when the index was deep in negative territory at -9.4 points, this value offers reason for hope.
Even though the rollercoaster ride of the data recorder over the past 18 months makes interpretation difficult, the ten-year high in economic expectations observed by GfK in June 2021 compared with 2020 is a clear indicator of robust confidence at a very high level. Even the slight decline of 3.8 points in July does not detract from this conclusion.
However, German consumer sentiment is obviously directly related to the development of the pandemic: In the reporting period, infection figures stabilized briefly, only to rise again. At the same time, the vaccination campaign in Germany slowed down, although large quantities of vaccine were available. According to GfK, both factors had a measurable, albeit not worrying, impact on consumer sentiment.
Income expectations are in line with the economic outlook and also show a moderate decline in July. The indicator falls by 5.1 points and now stands at 29 points. Here, too, the level is satisfactory, as shown by the increase of a good 10 points compared with the corresponding year-earlier figure.
The published consumer index is taken from the “GfK-Konsumklima MAXX” survey and is based on around 2,000 consumer interviews per month conducted on behalf of the European Commission. The data can be downloaded from the GfK website.
