First clouds in the economic sky: consumers want to be more stingy

economy

Wednesday, November 28, 2018

The recovery is apparently final. At least, this idea is germinating with consumers. Rising inflation and hotbeds of global turmoil darken the mood of buyers. For Christmas business but it does not matter.

High inflation and global economic uncertainties moderate German consumer confidence. International risks such as the trade dispute between China and the EU, the upcoming EU exit from the UK and discussions on the budget of the Italian state are increasingly worrying about German consumers, according to GfK in Nuremberg. You see "the first dark clouds in the economic sky".

In addition, Rolf Bürkl, a research scientist in consumer science at GfK, had recently had fewer financial resources available due to rising energy and food prices. Gasoline and fuel oil were significantly more expensive for weeks and led to rising inflation in Germany. The October price increase was 2.5% over the previous year – the highest value for more than ten years.

The rise in consumer prices is not inconsequential: "This nibbles the purchasing power of consumers, if more money has to be paid at the pump, it is lacking for other purchases . "

A tendency to save increases

In its monthly consumer climate study, GfK forecasts a drop of 0.2 points to 10.4 points in December. In October and November, the index was still at 10.6 points. The Germans have become more pessimistic, especially in terms of their expectations for economic development – the corresponding value has fallen for the second time in a row. Expectations about one's own income have also declined, while the propensity to save has increased. Germans prefer to spend more money for bad times.

At the same time, the situation on the German labor market is still very good, as is the evolution of income. "The pensions will be increased again next year," said Bürkl. This has led to the fact that consumers are still relatively unimpressed with regard to their propensity for consumption. Say: Consumers are always ready to spend money on major purchases. "This gives hope for Christmas business," said Bürkl. "The conditions are good."

The German Trade Association (HDE) also badumes that Germans will not be thrilled by presents this year. For the first time, more than 100 billion euros of toys, books, jewelry, perfumes, vouchers and other gifts should be distributed, the badociation recently announced. According to an HDE survey, each customer wants to spend an average of 472 euros for holiday gifts, nearly seven euros more than last year. Other polls are partly on much smaller sums.

"Seeds for the economic slowdown are filed"

This is the ninth consecutive year of growth for the retail sector. Many Germans are doing well, including sports, camping, cycling, food, cosmetics and personal care. Until now, GfK does not derogate from its forecast for private consumption for the entire year: researchers continue to think that they will increase by around 1.5% in 2018.

The good image will only change when the first companies start to change their plans – for example regarding the number of employees. Bürkl called for the creation of the automotive industry, diesel scandals, electromobility and trade disputes with the United States. After almost a decade of recovery, some would feel that the recession will never happen again. But do not believe that, said Bürkl: "If you look at all the framework conditions of a global economic nature, the seed is almost already breaking down."

GfK's consumer climate study is based on around 2,000 consumer interviews each month on behalf of the European Union. The consumer climate refers not only to retail spending but also includes rent, travel and health.

Source: n-tv.de