Consumer climate remains modest
Findings of the GfK consumer climate survey in November 2004
Nuremberg, Germany -
Movement in the indicators reflecting the consumer climate is still unclear. Although the indicators again failed to provide a clearly positive outlook, there is no longer any sign of the marginally negative trend of the previous month. The trend in Germany for consumers to make long-term purchases has even recovered somewhat. Expectations for the economy and growth in personal income, however, remained almost unchanged. As a result, the value of the consumer climate has risen accordingly and after the revised figure of 2.4 in November it stands at 2.7 points for December.
There is a strong correlation in Germany between the tendency to make long-term purchases and personal income expectations and job security, neither of which is currently at its highest at present. Nevertheless there is an upward trend in buying propensity, although this should be seen as more of a sign that there is a certain need to catch up and that consumers are using Christmas as an opportunity to carry out purchases, despite the tense situation regarding incomes. As expected, the usual Christmas purchases also play a role here.
Converting this into increased demand for consumer goods will be dependent on the next phase of tax reforms leading to improved incomes in real terms, without being considerably overshadowed by new and unforeseen burdens. A widespread upturn in consumer mood is not expected until there are clear signs not only of economic recovery, but also of easing in the situation in the labour market.