The GfK barometer at its lowest annual level: the price of gasoline harms the consumer climate

Ironically, at Christmas time, Germans are less and less motivated. The consumption climate determined by GfK has fallen to its lowest level in a year and a half.

The much higher inflation in October weakens the mood of German citizens. In Germany, prices rose by 2.5% more than in ten years. Gasoline and fuel oil were significantly more expensive for weeks and led to rising inflation in Germany. Because of higher fuel prices, people have had less in their bags recently, said GfK researcher Rolf Bürkl. "If more money has to be paid to distributors, that is missing for other purchases."

"First dark clouds in the economic sky"

December's consumer price barometer edged down 0.2 points to 10.4 points. This was reported by the Gesellschaft für Konsumforschung (GfK) for its monthly survey of 2,000 consumers. In October and November, the index was still at 10.6 points. Especially in their expectations of economic development, the Germans have become more pessimistic. The revenue forecasts have fallen to an annual low. The economic outlook has also been judged worse.

"Turbulence such as the US trade dispute between China and the EU and Brexit are of growing concern to German consumers," said GfK expert, Bürkl. "They see a shortness of economic momentum and the first dark clouds in the economic sky."

Christmas business should still go well

The hope of a good year-end push, however, encourages retailers to make larger purchases. "We badume that the Christmas market will remain stable," said Rolf Bürkl, GfK expert. The situation on the German labor market is still very good – and with it the evolution of income. "The pensions will be increased again next year," said Bürkl.

German retailers want to achieve for the first time more than 100 billion euros in the Christmas trade. The turnover is expected to increase 2.0% in November and December at the same period last year to reach 100.3 billion euros, predicts the HDE badociation. However, the growth rates of previous years would no longer be achieved. There was an advantage of 3.8% in 2017 and even 4.6% in 2016. According to an HDE survey, each customer wants to spend an average of 472 euros for holiday gifts, almost seven euros more than last year.

Consumer spending is expected to increase 1.5% in 2018

For German retailers, it is the ninth consecutive year of growth. Many Germans are in a consumer mood. Especially in segments such as sports, camping, cycling, food, cosmetics and personal care, sales have increased. 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 cited the auto industry, diesel-related scandals, electromobility and the trade dispute 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, conditions are almost thrown for a slowdown."

Source: boerse.ard.de