Nuremberg, 30 April 2013 – The consumer mood in Germany in April is extremely robust despite the strengthening economic headwinds. Both income expectations and willingness to buy edged marginally higher. In contrast, economic expectations fell slightly for the first time this year. Following a revised figure of 6.0 points in April, the overall indicator is forecasting a value of 6.2 points for May.
The escalation of the debt crisis in Cyprus has clearly not had any lasting impact on German consumers. The consumer mood is still extremely robust and income expectations and willingness to buy again marginally improved on what was already a very good level. In view of the stable labor market figures and rising incomes, consumers do not appear to consider their own economic situation to be at risk. However, they are not quite so optimistic when it comes to economic development in general, and economic expectations fell slightly.
Another factor behind the upward trend in the consumer climate is the low propensity to save in Germany, which dropped to an historical low in April. The mandatory levy in Cyprus has therefore also shattered the trust of German savers in the safety of their deposits.
Economic expectations: upward trend halted
Following three consecutive rises in recent months, economic expectations fell slightly in April. The indicator dropped for the first time this year and after losing 2.1 points, it slid back into negative territory. It currently stands at -0.5 points, which is below its long-term average.
The news that the eurozone will remain in recession again this year is clearly curbing economic optimism in Germany as well. Increasingly, consumers seem to be under the impression that the moderate recovery forecast for the German economy this year will tend to be rather sluggish, if it materializes at all. The weak phase in a series of key export countries means that exports are unlikely to develop as well as originally expected. This assessment is also shared by managers of German companies and the ifo Business Climate Index fell accordingly in April.
Income expectations: slight gains
After recording marginal declines in the past two months, income expectations were up again slightly in April. With a rise of 1.4 points, the indicator presently stands at 30.8 points and therefore remains at a high level.
As before, German consumers are still extremely optimistic about the future development of their own financial circumstances – even though the international headwinds are strengthening. There is a consensus that the employment situation in Germany will remain stable with no need for concern regarding a significant rise in unemployment. The collective bargaining agreements already reached this year point to real increases in income for many workers. The salary rises are currently in the region of three percent. Given the anticipated rate of inflation for this year of just under 2 percent, this is likely to mean an increase of around 1 percent in real terms.
Willingness to buy: slightly higher
After the minimal losses seen in March, willingness to buy rose again slightly in April. The indicator climbed 1.4 points to 37.6 points. This means that Germans’ desire to shop stands at its highest level for over a year and is up by 10 points compared with the same period in 2012.
As before, the reasons for the extremely positive willingness to buy remain the stable employment situation and pleasing increases in incomes combined with a low rate of inflation. On top of this, trust in the safety of savings investments has been undermined in the long term by the events in Cyprus. Among other negative effects, this led to a drop in the propensity to save in April to a new historical low. Uncertainty regarding the financial markets is prompting consumers to invest their money in major purchases rather than putting it in the bank, especially as the present historically low interest rates do not even offset inflation.
Consumer climate: rising again
Following a revised figure of 6.0 points in April, the overall indicator is forecasting a value of 6.2 points for May 2013. The consumer climate is therefore able to improve somewhat again. Whether this positive trend will continue in the coming months remains to be seen. In addition to what happens next in the debt crisis, the development of the labor market, in particular, will have a decisive influence here. This is because stable labor market figures provide the basis on which incomes are able to rise. If inflation also remains moderate, the key prerequisites are in place for stable consumer spending. However, this is contingent on no further escalation in the context of the debt crisis. Should this worsen, then 2013 will also be a difficult year for consumption.
The following table shows the development of the individual indicators in April in comparison with the previous month and prior year:
| April 2013 | March 2013 | April 2012 | |
| Economic expectations |
-1.5 |
0.6 |
8.5 |
| Income expectations |
30.8 |
29.4 |
33.0 |
| Willingness to buy |
37.6 |
36.2 |
27.6 |
| Consumer climate |
6.0 |
5.9 |
5.8 |
The following chart shows the development of the consumer climate indicator over the past few years:
GfK Consumer Climate indicator (as at: April 2013)
These findings are extracts from the “GfK Consumer Climate MAXX survey”, which is based on around 2,000 consumer interviews conducted each month on behalf of the European Commission. The report contains charts, forecasts and a detailed commentary regarding the indicators. In addition, the report includes information on proposed consumer spending in 20 different areas of the consumer goods and services markets. The GfK Consumer Climate survey has been conducted since 1980.
The next publication date is Tuesday 29 May 2013
Further information: Rolf Bürkl, Tel. +49 911 395-3056,
konsumklima@gfk.com
The table below provides an overview of the following indicators:
Economic expectations |
This index is based on the following question to consumers: “How do you think the general economic situation will develop in the next 12 months?” (improve – stagnate – deteriorate) |
Income expectations |
This index is based on the following question to consumers: “How do you think the financial situation of your household will develop in the next 12 months?” (improve – stagnate – deteriorate) |
| Consumption and buying willingness | This index is based on the following question to consumers: “Do you think it is advisable to make major purchases at the moment?” (good time – neither good nor bad time – bad time) |
| Consumer climate | This index is used to describe private consumption. Key factors are income expectations, buying willingness and savings trends. The economic outlook has a more indirect effect on the consumer climate, generally as a result of income expectations. |
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