The economy Consumer climate in Germany brightens up
Consumer sentiment in Germany brightened in July. The European Football Championship could have triggered a one-off effect.
24.07.2024, 09:27
SDA
According to the latest consumer climate study, the mood of German consumers improved significantly in July. Expectations regarding income increased significantly, while economic expectations and the propensity to make major purchases rose at least moderately, according to the study by the Nuremberg-based institutes GfK and NIM.
Index climbs
Compared to the previous month, the consumer climate index has climbed by more than three points to - 18.4 points. However, this is still a very poor value in a long-term comparison. Before the coronavirus pandemic, the consumer climate was comparatively stable at around +10 points.
"The brightening of the consumer climate in July is primarily due to Germans' increased income expectations. However, the euphoria triggered by the European Football Championship in Germany in many parts of the population is very likely also playing a role here," said Rolf Bürkl, consumer expert at NIM. "However, it remains to be seen whether this effect is sustainable or just a short-lived flare-up."
If the improvement in the consumer climate turns out to be a flash in the pan, the road out of the slump will be long and arduous. The majority of German households are currently seeing real income growth thanks to salary increases and a slight fall in inflation.
Planning security required for purchases
At the same time, however, planning security for consumers must return in order to improve their propensity to make larger purchases. Due to the improved income prospects, this component also improved by 4.6 points in July - a higher value was last measured in March 2022. However, consumer experts fear that the euphoria could quickly die down again. German citizens' assessments of the economy are cautious. According to experts, an economic recovery will only accelerate in the coming year.
