The mood of German consumers has deteriorated again. The German Trade Association (HDE) said this on Monday, citing the current HDE consumption barometer for May.
The monthly index, which is based on a survey of 1,600 people on consumption-related topics, had fallen further compared to the previous month. According to the industry organization, it fell to its lowest level since February 2023. The main reasons for the ongoing downward trend were above all “rising prices and concerns about a weak economy”.
The respondents assessed the overall economic development as significantly more negative than in April. The expectations in this regard are more pessimistic “than they have been since January 2023,” according to the HDE. Accordingly, consumers were more skeptical about their own income situation.
“The declining optimism is likely to have various causes,” explained the authors of the study. “Firstly, the situation on the labor market remains tense. Secondly, mobility costs are rising due to higher oil prices. Commuters therefore have less of their income to freely use. And thirdly, this could also result for all consumers from rising inflation.”
Geopolitical and economic uncertainties are dampening the mood to buy
Due to concerns about their own financial situation, the propensity to buy continued to decline. At the same time, those surveyed stated that they wanted to invest more savings in view of the omnipresent economic and geopolitical risks.
Since there are currently no signs of an improvement in the general conditions, the trade association’s outlook was gloomy. “Against this background, no increase in private consumption and overall economic growth is expected in the coming weeks and months,” explained the HDE. “Hopes from the beginning of the year for an economic recovery were dashed by the Iran war.”