German consumer sentiment has deteriorated significantly recently. The GfK and the NIM institute reported the so-called Consumption Climate Index for October at -30.6 points-a drop of 3.8 points compared to the revised figure of -26.8 points in the previous month.
This marked decline in the consumption climate indicator is largely attributed to a sharp reduction in expectations regarding household income this month. The income indicator fell by 16.7 points, settling at -15.0. This figure represents the lowest point since April 2026, although back then the reading stood at an even lower -24.4 points. Rolf Bürkl of NIM noted, “The majority of households expect that high energy prices will reduce their purchasing power. Consequently, they are more skeptical about future income prospects over the next twelve months.”
In addition to the lowered income outlook, the propensity to save increased noticeably during September, further depressing the consumption climate. The saving tendency rose to 21.5 points (up from a previous reading of 6.0 points). This level is similar to the saving sentiment observed during the 2008 financial and economic crisis. According to the institutes, high energy costs are fueling uncertainty among consumers, leading them to deem saving prudent given the overall economic situation. Furthermore, detailed analyses by NIM suggest that this increased propensity to save was particularly pronounced among households with solid financial stability.
In contrast to the income expectations and saving tendency, the inclination to make purchases remained relatively stable. This indicator dropped one point to -10.8. This figure is still marginally above the corresponding month from the previous year (September 2025: -11.6 points). However, this level remains exceptionally low, having hovered around the -10-point mark for more than three years.
While current income expectations are viewed with increased skepticism, consumers’ broader economic outlook has continued to improve slightly, although the rate of growth has slowed. The indicator gained half a point, now sitting at -3.4 points. This marks the fifth consecutive increase in the metric.
