Source: Sharecast
The forward-looking GfK consumer climate indicator fell by 1.2 points to -21.5 in August, surprising economists who had pencilled in a slight uptick to -19.2. This was the lowest level since April.
Income expectations were higher for the fifth month in a row, GfK said, with consumers predicting increases in their purchasing power over the coming months on the back of solid wage agreements and pension increases – aided by a moderate inflation rate.
However, economic expectations suffered a "severe setback" in July, following five straight increases, with the indicator falling 10 to 20.1, as "US tariff policy continues to hang over consumers", GfK said.
Consumer willingness to buy also declined, with the spending indicator falling 3 to -9.2 – its lowest since February – as consumers show uncertainty about making major purchases despite improved income prospects.
Meanwhile their willingness to save continues to rise, with the savings indicator up 2.5 to 16.4 – its highest level in nearly one and a half years.
“The recovery in consumer sentiment continues to be postponed, because the willingness to save has risen again,” said Rolf Bürkl, head of consumer climate at the Nuremberg Institute for Market Decisions (NIM), of which GfK forms a part.
“The majority of consumers still consider it advisable to hold back their money rather than spend it on major purchases. Our in-depth analyses show that general uncertainty, the need to be prepared for difficult situations, and high prices, especially for food, are the main reasons for this."