Local retailers cannot expect their situation to improve even after the turn of the year. In January, consumers’ purchasing mood fell again, the German Trade Association (HDE) announced on Monday, citing current survey results.
“The budget policy developments and the economic outlook are primarily causing uncertainty and a correspondingly subdued mood,” explained the industry organization. Given these factors, private consumption will probably initially develop subdued in the coming weeks and months.
The association was referring to the HDE consumption barometer for January, which suffered losses again after an upswing in December. 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. Despite the recent decline compared to the previous month, the consumption barometer “continues to be above its previous year’s level,” according to a statement.
Economic uncertainties and higher burdens are dampening the mood to buy
In January, those surveyed were significantly more pessimistic about overall economic developments than in previous months. Individual income expectations also fell accordingly.
Consumers “assume that their disposable income will decrease in the near future,” explained the HDE. “Although there is still no noticeable slump in the labor market, there are still no signs of an improvement in the situation.” Added to this are “the federal government’s budgetary policy decisions, which result in noticeable burdens for consumers, for example in terms of energy costs”.
The subdued expectations had an impact on respondents’ financial plans. Although the desire to invest savings remained almost unchanged compared to December, the propensity to make purchases fell significantly. In view of the weakened purchasing mood, “private consumption will not pick up at the beginning of 2024,” the association summarized.