The recovery in German consumer sentiment comes to a halt in September. For the first time since October last year, there has not even been a marginal increase in sentiment. This is the result of a recent survey published by the German Retail Association (HDE) on Monday.
The recovery has already weakened in recent months, but in September “it is now coming to a standstill,” according to the HDE in a statement. “The fact that the already weak recovery in consumer sentiment has come to a halt marks a turning point.”
The association referred to the latest results of the HDE consumption barometer. This index, which is compiled monthly on the basis of a survey of 1,600 people on issues related to consumer behavior, showed no improvement in August and remained at a low level.
Beginning of a downturn in consumer sentiment?
The trade association fears that the standstill could mean the beginning of a downturn in consumer sentiment in Germany. However, it remains to be seen whether there will actually be a trend reversal, because that will only become clear in the next few months “depending on the further development of the overall economic environment”.
However, private consumption as a support for the economy cannot be counted on. According to the association’s findings, this will only develop weakly in the coming months, which means that no growth impulses are to be expected from this side. Private consumption will therefore fail to drive growth this year.
Consumers more optimistic than companies
However, a significant decline in private consumption is not to be expected, because the positive trend in consumers’ propensity to buy, which was already recorded in August, is continuing. The value and thus the willingness of consumers to purchase goods and services increased both compared to the previous month and compared to the same month last year.
However, the value has not yet recovered, as it is still well below the long-term average. According to the HDE, the propensity to buy is only recovering slowly and from a low level. At the same time, however, the intention to save is growing due to the omnipresent uncertainties. The income situation of consumers, on the other hand, has not changed compared to the previous month.
One bright spot is the improvement in consumer economic expectations. After declining in recent months, they are improving in September, according to the survey. “In contrast to companies, consumers are optimistic about the economic outlook,” explained the HDE.