As in the previous month, the mood of German consumers improved only marginally in June. This is the result of the latest survey results published by the German Retail Association (HDE) on Monday.
The industry organization admitted in a statement that the upward movement was “continuing to be subdued”. “Consumers’ propensity to consume is well below the long-term average.” In view of the most recent development, “a significant stimulus (…) in private consumption is not to be expected in the coming months”.
The association referred to the results of the HDE consumption barometer for June. According to a statement, the monthly index, which is based on a survey of 1,600 people on consumption-related topics, has risen “only slightly” compared to May. Only “subdued growth” is emerging for the coming months.
Consumers’ propensity to buy is increasing slightly
According to the current study, the consumers surveyed were more pessimistic about the overall economic development than they were in May. Individual income expectations also fell slightly.
At the same time, however, the buying mood of the survey participants increased in June. “Whereas last month there was a shift away from consumption and towards saving, there is now a reversal of the trend,” explained the HDE. “Consumers’ propensity to buy is increasing slightly. At the same time, their propensity to save is declining.”
Trade association sees improvement in mood “only in small steps”
Overall, however, the conclusion of the authors of the study was cautious: “Looking back at the first months of 2023, consumer sentiment reveals a similar picture to that of overall economic development: there is a lack of momentum,” they explained. “Consumer sentiment is brightening, but only in tiny steps.”
With consumer sentiment remaining “both below pre-Russian war of aggression in Ukraine and below pre-pandemic levels,” there is little reason for optimism at this time. “While there was still hope for a noticeable macroeconomic recovery at the beginning of the year, the probability of this has steadily decreased in the previous months,” the market researchers admitted. If consumer restraint persists, it is to be expected that private consumption will not be able to provide any support for an economic improvement for the time being.