Consumer climate constant, as Germans remain
disinclined to save
Findings of the GfK Consumer
Climate study for August 2012
Nuremberg, 28 August 2012 – August saw a weakening of
the consumer sentiment in Germany. While the indices for income expectations
and willingness to buy only suffered a moderate fall, economic expectations
were markedly more pessimistic. Due to a downward trend in the inclination to
save the overall indicator maintained a constant level with a forecast of 5.9
for September, following a value of 5.9 points in August.
German consumers
fears of a noticeable weakening of the economy continued to rise in August, a
fact borne out by the third marked decline in economic expectations. This
development has also had an impact on income expectations and consumption
trends, both of which, although remaining at a high level, suffered a moderate
fall. In spite of the negative effects, the overall consumer climate indicator
remains stable, since the inclination to save is also currently regressive, as
a result of which consumers have more disposable income to spend.
Economic
expectations: a marked drop
For the third time in succession, the economic
expectations of German consumers have recorded a marked drop. In August, the
index fell by 13.3 points to register -18.9 points. In the prior month, the
fall was 8.6 points. In a year-on-year comparison, the index is currently
running at a 32.3 point loss.
To growing degree, German consumers fear that the
German economy will also fall victim to the recession in several eurozone
countries. Although up to now, the German economy has proved to be resilient
enough, the pace of economic growth was somewhat slower in the second quarter. According
to data published by the German Statistical Office, compared with the prior
period, Gross Domestic Product only rose by 0.3 percent, after the 0.5 percent
growth registered in the first quarter of the year.
The economic weakness of a series of countries across
Europe has resulted in a significant decline in German exports to Europe . In particular, the negative developments in Spain , Italy
and Greece
Income expectations: a moderate fall
The significant decline in economic expectations is
the likely reason underlying the fall in consumer income expectations in August.
The drop of 4.7 points is already the second in succession, however, the
decline is moderate. At its current level of 31.6 points, in general, the level
of the indicator remains good, added to which it is still 4 points higher than
the corresponding value in the same period of the prior year.
The good level of the index shows that income
expectation are still resilient to the macro-economic risks inherent in the
euro crisis, although it has to be said that the initial signs of an imminent
fall are there. The positive outcome of wage bargaining agreements in
comparison with previous years and in association with a very stable labor
market are lending further considerable support to income expectations. Nevertheless,
another marked rise in fuel prices recently may well serve to stoke up
inflation. If this happens, the subsequent weakening of purchasing power will
impact on the income expectations index.
Willingness to buy: a marginal decline
Conversely, there has been little movement in consumer
willingness to buy. After three moderate rises in a row the indicator dropped
by 2.7 points in August. At its current level of 33.1 points, the index remains
at a high level, although it is slightly below its level at the same time last
year.
In spite of growing international upheavals, German
consumers have so far maintained their willingness to buy at a high level. A
stable job market and the comparatively high wage agreements compared to
previous years are proving to be positive factors encouraging major purchases. Added
to this is the fact that as a result of the present financial and euro crises,
there are still considerable reservations concerning investing money with the
banks. There is also great anxiety about the potential loss of stability of the
currency. Beyond this, the interest rates currently earned by any money invested
is so low, that not even inflation can compensate, a fact confirmed by the
decided fall in consumer inclinations to save.
Consumer climate: no
change
Following a value of 5.9 in August, the overall
indicator is again registering a value of 5.9 points for September 2012. With
this, the consumer climate remains stable at a high level, although this is
only because of the distinct drop in consumer inclinations to save.
Private consumption continues to be an important prop for
Germany
In a year-on-year comparison, private consumption rose
by around 1.2 percent in the first six months of 2012. Consequently, the current
rate of growth falls within the scope of the GfK forecast for the year, which
indicates that private consumption is likely to rise by around 1 percent in
real terms this year.
The following table shows the development of the
individual indicators in August in comparison with the previous month and the
prior year:
|
|
August 2012
|
July 2012
|
August 2011
|
|
Economic expectations
|
-18.9
|
-5.6
|
13.4
|
|
Income expectations
|
31.6
|
36.3
|
27.6
|
|
Willingness to buy
|
33.1
|
35.8
|
36.9
|
|
Consumer climate
|
5.9
|
5.8
|
5.3
|
GfK Consumer Climate indicator (as at: August 2012)
The survey
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
EU Commission. The report contains charts, forecasts and a detailed commentary
regarding the indicators. In addition, the report includes info rmation 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.
Publication dates for 2012:
|
Tuesday,
25 September, 2012
|
Friday,
26 October, 2012
|
|
Monday,
26 November, 2012, 1 pm
|
Friday,
21 December, 2012
|
The table below provides an overview of the individual 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.
|
About GfK
GfK is one of the world’s largest research companies, with more than
11,500 experts working to discover new insights into the way people live, think
and shop, in over 100 markets, every day. GfK is constantly innovating and
using the latest technologies and the smartest methodologies to give its
clients the clearest understanding of the most important people in the world:
their customers. In 2011, GfK’s sales amounted to €1.37 billion.
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