The mood of German consumers is still low. This is the result of current findings published by the German Retail Association (HDE) on Monday. The HDE consumption barometer for July shows “actually no changes” compared to the previous month, the industry organization said in a statement. The monthly index is based on a survey of 1,600 people on consumption-related topics. As the main reason for the continued “extremely low level” of the consumption barometer, the HDE named “the great uncertainty in view of the geopolitical and the overall economic situation”.
Compared to June, the sub-indicators for general economic expectations and individual income prospects remained almost unchanged. The authors of the study explained that the “key drivers of consumer sentiment” – the Covid-19 pandemic and the war in Ukraine – have recently shown “no perceptible dynamics”. “For the moment, there is nothing to indicate that the situation in consumers’ everyday life is changing significantly.” In view of the most recent development, however, more participants in the survey feared further increases in prices and interest rates.
In addition, the HDE determined a slight increase in the propensity to buy. In contrast, the intention to save more decreased slightly compared to June. This shift was “presumably holiday-related,” explained the market researchers: inside. “The coming months will show whether this is the beginning of a slow departure from consumer restraint. At least with regard to private consumption, there is reason to be cautiously optimistic.”
Overall, the further development is “unclear” in view of the ongoing uncertainties in the formative geopolitical and macroeconomic factors, the authors of the study conceded. “As soon as this changes, consumer sentiment is likely to react more again – positively or negatively.” In the coming weeks, however, private consumption will probably “not show much dynamism in Germany,” she concluded.