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Home arrow Market Research Findings arrow Economic Climate and Consumer Confidence arrow Slight Cooling Of The German Consumer Climate
Slight Cooling Of The German Consumer Climate PDF Print E-mail
Written by GfK   
21 Dec 2009
Findings of the GfK consumer climate study for November 2009

The consumer climate declined slightly as 2009 draws to a close. While the propensity to buy stabilized at a good level, conversely, economic and income expectations dropped back moderately.

The overall indicator is forecasting a value of 3.7 points for December, following a value of 4.0 points in November.

After their continuous upward trend of the past seven months, German economic expectations dropped back down in November, primarily as a result of growing public fears of rising unemployment.

In the wake of this, income expectations also fell, in particular, given the fact of the reduced effect of the low energy prices, which have been fuelling purchasing power.

However, the propensity to buy remained at a good level, even without the benefit of the scrappage scheme. In all likelihood, this is attributable to the stable price climate.

Economic expectations: curbed
Even if all the experts are predicting an economic upswing for the coming months, consumers seem to be regarding such statements with caution at the moment. The indicator lost just under 8 points and now stands at 0.9 points.

Compared with the same period the previous year, the economic climate is recording a marked increase of 31 points.

However, German consumers are still assuming that the process of economic recovery will be sustained next year. This is confirmed by the Ifo Business Climate Index, which unexpectedly rose sharply in November, and also by the current forecast published by the German Council of Economic Experts, which is predicting GDP growth of 1.6% in 2010, after a 5% fall this year.

As early as the third quarter this year, GDP was already up by 0.7% on the same period in the prior year. As an exporting nation, Germany should certainly benefit from the improved prospects for global trade.

This optimistic scenario supports the view that developments on the job market may not be as dramatic as might have been anticipated some months ago.

Although until now, it has remained amazingly buoyant, a marked rise in unemployment must be anticipated for the coming months.

According to German Council of Economic Experts forecasts, unemployment will be running at an average rate of 4 million in 2010, which is 600,000 more than in this year.

Income expectations: a further decline
In the wake of the slight drop in income expectations in October, the indicator this month recorded a somewhat stronger decline. The index fell by 6.7 points to stand at its current level of 6.2 points.

The further drop has now halted the upward trend recorded since the beginning of 2009. However, the indicator is still a good 13 points up on the same period the previous year.

The decline may be primarily attributable to the current slight contraction of economic expectations, as a result of which more consumers are being cautious about their income expectations.

Beyond this, energy prices have recently risen again sharply and by mid-October, the price of crude oil was higher than in the corresponding period in the prior year.

To the consumer, this means a drop in the boost to their purchasing power with the resultant impact on their income expectations, although at the moment, this effect is being offset, at least partially, by the fierce price competition raging in food retailing.

Propensity to buy: stable at a good level
After the losses of the prior month, the propensity to buy again stabilized in November this year. The indicator rose very slightly by 0.2 points to stand at its current level of 26.3 points.

With this, consumer propensity to buy is bucking the trends recorded by economic and income expectations. The index is sustaining its generally pleasing level. In a year-on-year comparison for the same period, this represents an increase of 33 points.

The end of the scrappage scheme in September this year has evidently had no lasting impact on consumer propensity to buy.

This may also be accounted for by the fact that car dealers are currently making huge efforts to stimulate sustained consumer enthusiasm with large discounts.

Consumer climate: moderate losses
The overall indicator is forecasting a value of 3.7 points for December, following a value of 4.0 points in November. This means that for the second time in a row, the consumer climate has declined.

However, this development does not alter the fact that private consumption will remain the mainstay of the economy this year, given that where investment and exports are concerned, the recession has meant huge losses.

The stable propensity to buy may well bring a positive surprise in the imminent seasonal Christmas trade, particularly since retailers are enticing consumers with attractive prices.

The survey

These findings are extracts from the "GfK consumer climate MAXX survey”, which is based on around 2,000 consumer interviews conducted each month on behalf of the EU Commission. The report contains charts, forecasts and a detailed commentary regarding the indicators.

In addition, the report includes information on proposed consumer spending in 20 different areas of the consumer goods and services markets. The GfK consumer climate survey has been conducted since 1980.

The next publication date will be on December 22, 2009.

Further information: Rolf Bürkl, tel. + 49 911 395-3056, This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

The GfK Group
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Nuremberg - 25  November  2009

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