Consumer sentiment in Germany saw a slight deterioration this month, with the corresponding index dropping by 0.3 points, according to GfK and the NIM Institute. This modest decline is primarily attributed to lower expectations regarding income, coupled with a higher tendency to save. However, while income expectations took a slight dip, consumer propensity to purchase and expectations about the overall economy developed a somewhat more positive trend.
Consumer confidence regarding income, which had been gradually brightening in recent months, is now again showing a slight decline, with the indicator dropping 2.3 points to -14.5. Overall, the latest survey shows that people remain pessimistic about their financial situation over the next twelve months. Conversely, the trend of decreasing the propensity to save, observed at the start of the year, did not continue into July; the indicator rose by 3.1 points to 17. Compared to the last decade’s average of approximately -24 points, the current figure is quite high, suggesting that, given the general economic conditions, people still consider saving advisable.
Regarding purchasing intent, it saw a moderate rise of 3.5 points to -9.9 points in July. Although consumers currently perceive the timing for major purchases as slightly more favorable than the previous month, the index remains low overall, indicating that underlying uncertainties continue to temper the willingness to consume. Rolf Bürkl, from the NIM, commented that “consumer sentiment remains largely unchanged.” He noted that while purchasing intent showed a moderate increase, it remains very reserved. Since income outlooks dropped slightly and savings willingness moderately increased, ongoing uncertainty is causing many households to remain cautious with spending.
On a different note, consumer expectations regarding economic conditions improved for the third consecutive month, with the indicator rising by another 2.4 points to -6.3 points. This suggests that pessimism is receding. Nonetheless, the majority of consumers still anticipates a worsening of the economic situation in the coming year.
Furthermore, as prices at fuel pumps felt a notable increase following the end of the tank discount in June, this was reflected in price expectations among consumers. The corresponding indicator rose slightly by 0.8 points to -2.1 points, indicating that concerns about inflation have recently picked up again, according to the analysts.
When referencing the entire “consumption climate,” which compiles all individual indicators, the previous month’s value was revised downward to -29.3 points. The most current figure assigned by the participating institutes for the coming month, August, is set at -29.6 points.
