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26 November 2012
Mood to shop remains stable among Germans

Findings of the GfK Consumer Climate study for Germany for November 2012

Nuremberg, 26 November 2012 – A varied picture emerges of the mood among consumers in Germany in November. While economic expectations improved slightly, both income expectations and willingness to buy dropped. Following a revised value of 6.1 points in November, the overall indicator is forecasting 5.9 points for December.
As a result of the European debt crisis and the clear deterioration of the economic situation, German consumers continue to be unsettled. Despite this, in November, economic expectations have fared well, albeit at a low level, rising slightly for the third consecutive time. The economic situation did, however, have an impact on income prospects, which fell quite dramatically. In the wake of this, willingness to buy also decreased slightly, although it still remains at a very high level. In consequence, the upward trend in the consumer climate has ceased and the indicator value has fallen slightly as the year draws to a close.

Economic expectations: stable a low level

Despite the recessionary trend, economic expectations have remained stable in November. In fact, the indicator registered a slight improvement for the third consecutive time. As in the previous two months, the increase was again only very moderate in November, rising 1.2 points to bring the current indicator value to -14.6 points. Although economic signals are not particularly encouraging at present, Germans are not becoming more fearful of recession. In light of the weaker economic period in the eurozone, German exports to these countries have collapsed. Until now, the fall has been compensated for through the continued good export situation with other economic areas, such as Asia and the USA.

According to initial figures from the Federal Office of Statistics, in the third quarter of 2012, gross domestic product (GDP) only increased by 0.2 percent on the previous quarter. When it comes to the outlook for the next two quarters, experts do not think it will be much brighter, as GDP is expected to stagnate or even decrease slightly. Accordingly, the forecasts for Germany over the coming year were also revised downwards quite considerably. In its recently published Annual Economic Report for 2012/13, the German Council of Economic Experts anticipates that GDP will only grow by 0.8 percent both this year and next year. Contrary to expectations, the ifo business climate index rose by 1.4 points in November.

Income expectations: clear drop

After rising in the previous month, income expectations registered a fall in November. At 12.1 points, the drop was double the increase seen in October and the indicator is currently at 17.8 points. The downward trend has therefore somewhat intensified again. Despite this, the overall mood in relation to income is still good and is well above the long-term average of 0 points.
However, Germans continue to think that their income will soon rise. As inflation will not go up substantially in the coming months, a considerable proportion of the working population will enjoy increases in real terms. Nonetheless, it is essential that the labor market remains stable for this good development to occur. In this respect, forecasts are extremely encouraging. Employment will remain at its current high level, although it is unlikely that unemployment will decrease further in comparison with the previous year. 

Willingness to buy: marginal fall

In contrast to the worsening income expectations, willingness to buy has remained very high. Even so, a decrease of 4.5 points was recorded in November, which is partly attributable to the significant drop in income expectations. The indicator is still at an extremely good level of 29.4 points at present. It has therefore consistently been in the region of between 30 and 40 points for more than two years.
This great stability is above all due to the positive labor market figures. High employment curbs fears of job losses and therefore inspires planning security, especially when it comes to making larger, more expensive purchases. The sustained moderate rate of inflation is also bolstering the mood to shop, as is German consumers’ relatively low propensity to save money. The extremely low interest rate and uncertainty regarding the European debt crisis are not optimum prerequisites for saving. Instead, consumers are preferring to make expensive purchases, rather than hand their money over to the banks.

Consumer climate: upward trend ceased

Following a revised value of 6.1 points for November, the overall indicator is forecasting 5.9 points for December. The upward trend for the consumer climate has therefore come to a standstill for the time being. Despite this slight decrease, the level is satisfactory. Private consumption is continuing to fulfill its role of being a key pillar for the German economy. In light of the recession in the eurozone, which is Germany’s key export area, and the global trend of economic weakness, it is likely that exports will provide less of a boost to GDP growth. Consequently, the domestic economy and especially private consumption are even more important for preventing the German economy from sliding into recession.
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 information 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. Further information: Rolf Bürkl, tel. +49 911 395-3056

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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