Just before the hot phase of the Christmas shopping season, German consumers’ purchasing mood has apparently deteriorated again. This emerges from current survey results published by the German Trade Association (HDE) on Monday.
In November, consumer sentiment fell “noticeably for the first time in twelve months,” explained the industry organization. “The tentative signs of recovery from the summer months are now gone.”
The trade association does not see any “noticeable growth impulses” from private consumption for the current year
The association was referring to the current HDE consumption barometer, which had fallen compared to October. The monthly index, which is created by the Handelsblatt Research Institute on behalf of the HDE, is based on a survey of 1,600 people on consumption-related topics.
The HDE admitted that the consumption barometer in November was “actually at the same level as in May of this year and therefore still well below the level before the pandemic”. “This means that little more than economic stabilization can be expected in the remaining weeks of this year. There will no longer be any noticeable growth impulses from private consumption in 2023.”
Hamas’ attack on Israel is causing additional uncertainty
The association cited, among other things, the deterioration in the geopolitical situation as the reason for the latest setback. “The last two weeks of the survey period, on the basis of which the current barometer value was calculated, were marked by the Hamas attack on Israel and the resulting tensions in the Middle East,” it said in a statement.
Although the forecasts from economic research institutes and the federal government have recently been somewhat more optimistic, the study participants were cautious about the overall economic development. The corresponding index fell slightly compared to October, and as a result the respondents’ individual income expectations also fell.
This had an impact on how consumers wanted to handle their money. According to the current HDE consumer barometer, the propensity to buy fell slightly in November, but in return the need to invest savings grew.