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GfK Consumer Climate Europe: Uncertainty impacts consumer sentiment

Leuven, 14.10.2016

GfK Consumer Climate Europe results for the third quarter of 2016

The top transnational issue in the third quarter, especially at the beginning, was the British people's decision to leave the EU. It was otherwise mainly country-specific themes that dominated discussions in the individual European countries. The economic and income expectations and propensity to buy indicators have not developed uniformly across Europe. Overall, the consumer climate for the EU28 fell from 13.1 points to 12.3 points from June to September 2016.

The beginning of the third quarter was marked by the UK's decision to leave the EU at the end of June. In almost all European countries and, of course, particularly in the UK, consumer confidence and above all economic expectations fell, dramatically so in some cases. The consumer climate EU28 fell from 13.1 points in June to 10.0 points in July. By September, it had recovered to 12.3 points. Already in August, however, discussions about Brexit had become significantly more subdued across Europe. Other country-specific themes in particular prevailed. It will only be possible to forecast with certainty the implications of Brexit on the mood of European consumers once the actual negotiations have begun and the UK's exit draws closer.

In economic terms, Europe is developing positively. Almost all countries are reporting economic growth, in some cases at very impressive rates. This is also reflected by the unemployment figures. In most countries, employment is rising and unemployment rates are falling. However, these positive aspects are not leading to a fundamental increase in economic and income expectations among consumers. Propensity to buy, too, has not always been consistent with the general economic development of each country. Other country-specific issues also currently appear to be at play, as well as general psychological factors and fundamental uncertainties, such as the ongoing war in Syria, terrorist attacks in France and Germany, the rise of right-wing populist parties in elections and polls and the upcoming US presidential election.

Belgian consumers lack optimism

The economic expectations of Belgians increased by 9.2 points during the third quarter and had returned to positive territory in September at 2.5 points. Belgian consumers therefore believe that the economic situation in the coming months will be considerably worse than the assessment shown by current economic data. The Belgian gross domestic product grew between 1.3 and 1.6 percent in the last few quarters compared with the respective same quarter of the previous year.

Income expectations increased by 2.3 points from June to September. However, the indicator level is still very low at -15.3 points. Consumers are clearly expecting unemployment rates to rise in the coming months.

Despite the overwhelmingly pessimistic assessment of economic and personal financial development, some Belgians currently seem to be willing to make major purchases. This is demonstrated by the relevant indicator. In September, it stood at 14.2 points. This is 1.2 points more than in June.

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GfK is the trusted source of relevant market and consumer information that enables its clients to make smarter decisions. More than 13,000 market research experts combine their passion with GfK’s long-standing data science experience. This allows GfK to deliver vital global insights matched with local market intelligence from more than 100 countries. By using innovative technologies and data sciences, GfK turns big data into smart data, enabling its clients to improve their competitive edge and enrich consumers’ experiences and choices.

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