Despite the looming winter recession, German consumer sentiment brightened slightly towards the end of the year. The recovery is "on shaky ground" in view of ongoing war and inflation concerns. According to the GfK survey, however, the loss of purchasing power will be less severe than expected.
The mood of consumers in Germany continued to improve slightly towards the end of the year. "The federal government's measures to cushion the exploding energy costs are clearly having an effect," explained the market research company GfK in Nuremberg. For the consumer climate in January, GfK expects another slight increase.
According to a Gfk survey, economic and income expectations as well as the propensity to buy improved towards the end of the year. Consumers' economic expectations increased for the second time in a row. According to GfK, they are assuming that Germany will slide into recession in the coming year - but it is likely to be less deep than feared a few months ago.
Income expectations increased for the third time in a row - but compared to December 2021 they were still very low. Energy prices have developed "somewhat more moderately" in the past few weeks, explained consumer researcher Rolf Bürkl from GfK. The relief packages were having an effect and consumers were hoping, with a view to the first wage settlements for 2023, that the expected loss of purchasing power "would not be quite as severe as feared".
The inclination to make larger purchases also increased - but the reluctance to buy remains high, explained Bürkl. "The uncertainty caused by the multiple crises, such as the pandemic, the Ukraine war and inflation, is still high." Above all, the expectation of significantly higher heating bills in spring 2023 is apparently causing a number of consumers to put money aside. "These funds are lacking in consumption elsewhere."
According to GfK, the consumer climate - calculated from all three indicators - rose from minus 41.9 points in November to minus 40.1 points in December. In January, market researchers expect an improvement to minus 37.8 points. But the recovery is "on shaky ground," Bürkl warned. "If, for example, the geopolitical situation were to deteriorate again and lead to a significant increase in energy prices, the light at the end of the tunnel would very quickly dim again or even go out completely." The consumer climate is still at a low point. The lack of consumption will remain a burden for the economic development in Germany in the coming year.
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 December 1st to 12th.
