A survey of the German consumer climate commissioned by the European Commission has found little to cheer the nation, according to researcher GfK.
The fieldwork, carried out in March, reveals that German consumers continue to be sceptical about economic and political events, fearing that further reforms in taxation and social contributions will leave them with even emptier wallets.
Hopes of any imminent economic upturn remain muted, due mainly to continuing high levels of joblessness. The impact of the war on Iraq has yet to bite and is expected to contribute to a further decline in optimism.
Economic expectations dropped slightly once again in March, down 2.7 points on the previous month. By and large, this negated February’s points gain and overall, at minus 28 points, economic expectations continue to remain at the level of the 1992/1993 years of recession.
But there is a faint silver lining to the gloom. Despite the depressing developments in economic and income expectations, the propensity to make purchases has grown again for the fourth month in a row. The indicator rose four points in March and at minus 26.6, is already almost thirty points above its all time low of minus 55.4 in November 2002.
This indicates that Germans’ propensity to buy is rising steadily, most likely due to the steady flow of special offers and discounts offered by retailers. Consumers are increasingly tending toward the belief that now is a good time to make major purchases, says GfK
The results are based on around 2,000 monthly representatively selected consumer interviews carried out on behalf of the European Commission. People were asked about their perceptions of the overall economic situation, their propensity to buy and their income expectations.
Data sourced from: Daily Research News Online; additional content by WARC staff