After a month-long upswing, the mood of German consumers has hardly improved recently. This is the result of the latest survey results published by the German Retail Association (HDE) on Monday. The HDE consumption barometer for April was “almost at the level of the previous month,” the industry organization said. “The persistently high rate of inflation and economic uncertainty are currently weighing on private consumption.” The monthly index is based on a survey of 1,600 people on consumption-related topics.
Hopes of an economic upswing are fading
According to the association, the reason for the setback was the cautious expectations of those surveyed with regard to overall economic development. “Your economic expectations are under the impression of the deteriorated outlook of economists, which gives consumers no hope of a noticeable overall economic recovery in the near future,” explained the HDE in a statement.
As a result, the study participants did not currently expect their personal income situation to improve. “The inflation rate is still at a fairly high level. Collective bargaining is currently taking place in many areas with distinctive demands, which the trade unions are unlikely to push through on this scale in the end,” the authors of the study explained. It is therefore not to be expected that real wages will “rise significantly”.
The propensity to buy of German consumers is falling again
The purchasing mood of those surveyed suffered from the gloomy economic prospects. The propensity to buy, which had risen for the last five months in a row, fell again slightly in April. Against the background of more pessimistic income expectations, the desire to invest in savings also declined.
Due to the persistently uncertain framework conditions, the HDE was cautious about the near future: “Since the starting point for further macroeconomic development has recently deteriorated with phases of economic weakness, the positive trend in consumer sentiment is now almost coming to a halt,” the association explained in a statement Communication. “Should the turbulence in the banking and financial sector have an overall economic effect in the coming months, it could also have a dampening effect on consumer sentiment.” Overall, the currently stagnating level of sentiment “is currently opposed to an economic recovery based on private consumption”.