Consumer confidence in Germany showed signs of stabilization in September, halting a three-month decline fueled by improved expectations regarding income, according to the latest Consumer Climate study released by the GfK.
The indicator, forecasting consumer sentiment for October 2024, registered an increase of 1.2 points compared to the revised figure for September (-23.5 points), reaching -22.3 points. This improvement is primarily attributed to a rise in consumer expectations regarding income. While this represents a slight positive shift, other factors continue to weigh on overall sentiment.
“After a period of consistent decline, consumer climate has paused its downward trajectory – at least for now” stated Rolf Bürkl of the Nuremberg Institute for Market Decisions (NIM), a contributor to the index calculation. “Income expectations, a key driver of consumer confidence, have rebounded from a reading of 3 to 15 points, effectively offsetting the drop seen in the previous month.
However, the longevity of this shift remains uncertain. “The consumer climate still remains at a remarkably low level” Bürkl cautioned. Geopolitical instability, concerns about job security and the resurgence of inflation anxieties are likely to impede a more substantial recovery in the near term.
Despite the positive income expectations, the willingness to make purchases actually decreased, falling 1.5 points to reach -11.6 points. This marks the lowest level since June 2024 when a reading of -13 points was recorded, reinforcing the persistently weak inclination to spend.
Furthermore, consumer expectations for the German economy over the next twelve months continued their downward trend, marking the third consecutive month of losses. The indicator declined by 4.1 points, reaching -1.4 points, a value not seen since January 2025 (-1.6 points), suggesting consumers do not anticipate a robust economic turnaround in the immediate future.