The mood of German consumers is improving as they head into November but remains ‘extremely low’ amid war in Europe and corporate crises at home, a key survey showed Tuesday.
A survey of around 2,000 people showed that consumer morale was up for a second month in a row, said pollsters GfK and the Nuremberg Institute for Market Decisions.
The forward-looking indicator rose 2.7 points to minus 18.3 points for November, they said in a statement that also revised the October data.
This is the highest level since April 2022, when the mood plummeted after Russia launched its full-scale invasion of Ukraine.
But ‘despite this increase, the level of consumer sentiment remains extremely low,’ said NIM consumer expert Rolf Buerkl.
‘The anxiety caused by crises, wars and rising prices is currently still very pronounced.’
This trend, he said, is ‘preventing positive factors, such as noticable rises in real income, from having a full impact.’ Â
Consumer sentiment has also been dampened by a barrage of news about big German companies in trouble, including plans for plant closures of auto titan Volkswagen.
‘Reports of a rising number of corporate bankruptcies and plans to cut jobs or relocate production abroad are also preventing a more significant recovery in consumer sentiment,’ said Buerkl.
Income expectations and likeliness to make purchases improved while propensity to save declined somewhat, the survey found.
But when it comes to expectations for the German economy over the next 12 months, pessimism deepened for a third month in a row.
The government in October revised downwards its economic growth forecast for this year. It now expects a contraction of 0.2 per cent, following a 0.3 per cent decline in 2023.