Improved feelings among consumers persist - Elevated doubt continues to linger - Improving consumer mood persists, yet a substantial level of uncertainty lingers on
In Germany, consumer sentiment continues to demonstrate a modest upswing despite pervasive economic uncertainty, according to the latest GfK Consumer Climate survey conducted jointly with NIM. The index currently stands at -19.9, marking a third consecutive monthly increase from -20.8 in May.
Despite this positive trend, overall confidence remains subdued. Rolf Bürkl, a consumer expert at NIM, attributes this to lingering economic uncertainties, including US trade policy, turmoil in the stock markets, and the persistent weakness of the German economy.
A bright spot in the report is the improvement in income expectations. They increased by 6.1 points to 10.4 points, the highest level since October 2024. Additionally, economic expectations rose by 5.9 points to 13.1 points, registering the fourth consecutive monthly increase and the highest value in over two years.
In contrast, the propensity to make purchases decreased, falling by 1.5 points to -6.4 points. Bürkl attributes this to consumers' prudent decision to save in the face of the current economic climate. The propensity to save, on the other hand, increased by 1.6 points to 10.0 points.
Approximately 2,000 consumers were interviewed for the survey, which took place from April 3 to 14. The consumer climate index refers to total private consumption expenditure, including retail, services, travel, rent, and healthcare services.
The ongoing US trade policy uncertainty, stock market turmoil, and concerns over a possible third year of economic stagnation in Germany continue to contribute to consumer caution, despite positive income and economic expectations. As such, while there is some optimism regarding Germany's economic future, consumer sentiment remains cautious due to ongoing global and domestic economic challenges.
- The ongoing uncertainty in US trade policy, volatility in stock markets, and potential prolonged economic stagnation in Germany could be constraining factors for the employment policy in EC countries, given the close interlinkages between consumer sentiment and business investment.
- Within the context of the subdued consumer confidence in Germany, the slow recovery in the employment market might persist, as businesses may adopt a cautious approach towards investment, particularly in labor force expansion, thereby putting a brake on the employment policy.
