Consumer sentiment in Germany continues to improve. As the current consumer barometer of the German Retail Association (HDE) shows, the upward trend continued in July. Although the index is increasing slowly, it has reached its highest level in a year. The positive trend in consumer sentiment is expected to continue, albeit not gain significant momentum. If consumers remain optimistic, a small recovery can be expected.
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The fact that no major jumps in private consumption are expected in the near future is primarily due to consumers' lower propensity to buy compared to the previous month. At the same time, they are more likely to reduce their savings efforts in the coming weeks and months and draw on savings.
The reason for this trend in consumer spending and savings activity is likely their more pessimistic view of their own income. Their expectations for the future development of their own income situation have deteriorated significantly compared to the previous month. Consumers' financial optimism, which still prevailed last month, may have been dampened by the federal government's announced but not yet implemented relief measures. Consumers, however, remain optimistic about economic developments.
Since July 2024, consumer sentiment in Germany has not been as positive as it is now. However, consumer sentiment is improving in small steps. Consumers are still acting too cautiously for a rapid recovery in private consumption, and consumer reluctance is still noticeable. Therefore, a major growth spurt is not expected for the time being, even in the overall economy.
The HDE Consumer Barometer, published on the first Monday of each month, is based on a monthly survey of 1,600 people on purchasing propensity, saving propensity, financial situation, and other consumption-relevant factors. The Consumer Barometer, compiled by the Handelsblatt Research Institute (HRI) on behalf of the HDE, serves as an indicator for private consumption. It does not reflect current consumer behavior, but rather the expected mood for the next three months.
More information:
Handelsverband Deutschland
www.einzelhandel.de