The buying mood of German consumers has continued to deteriorate. This is the result of current findings published by the German Retail Association (HDE) on Monday. The industry organization referred to the results of the HDE consumption barometer for May. The monthly index is based on a survey of 1,600 people on consumption-related topics.
According to the HDE, the consumption barometer fell in May “for the sixth month in a row” and thus reached another “all-time low”. The main reason for the downward trend is currently the expected consequences of the Russian invasion of Ukraine, while the Covid 19 pandemic “only plays a subordinate role in the everyday lives of consumers”, the authors of the study explained.
War in Ukraine weighs on consumer sentiment
With regard to general economic development, the respondents were again more pessimistic than in the previous month, while individual income expectations remained stable. In view of the great uncertainty about the further effects of the Ukraine war and the recently exceptionally high inflation, consumers’ propensity to buy continued to decrease. According to the market researchers, this sub-indicator also fell to a new historic low in May. A sustained trend reversal is also not to be expected for the time being: “Only when the acts of war have come to an end will the economic situation and private consumption regain momentum,” was their conclusion.
In view of the current survey results, the HDE was correspondingly pessimistic: “The deterioration in consumer sentiment is much less than in the previous month, but the prospects for private consumption in the next three months remain gloomy,” the association explained.