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Shopping street in Neuss: “Consumers are very unsettled”

Photo: Michael Gstettenbauer / IMAGO

The Germans remain in austerity mode.

According to the latest survey by market research institutes GfK and NIM, consumer sentiment only brightened slightly in February.

Expectations regarding income are increasing.

But a high propensity to save and little hope for a better economy led to larger purchases being postponed, the institutes said.

»Consumers are very unsettled.

In addition to the continued rising prices, weaker economic forecasts for the German economy this year are likely to be an important reason for this," said Rolf Bürkl, consumer expert at the Nuremberg Institute for Market Decisions (NIM).

The propensity to save has reached its highest level since the financial crisis of 2008/2009.

Rising incomes expected

For the consumer climate, the Nuremberg market researchers are forecasting a value of minus 29 for March after minus 29.6 in February.

Before the corona pandemic, the consumer climate was comparatively stable at around plus ten points.

Expectations regarding income are primarily responsible for the slight improvement.

The indicator for this climbed to its best value since February 2022. “Significant wage and pension increases in conjunction with slower price increases will lead to noticeable real income increases,” predict the market researchers.

The inflation rate was only 2.9 percent in January.

However, the federal government's economic prospects had recently deteriorated significantly.

“Germany must continue to wait for an economic recovery,” said Bürkl.

Even at the beginning of 2024, consumers see no signs of a sustainable recovery in the German economy.

The poor mood is also depressing companies' willingness to hire new staff.

“The weak economic development is making companies hesitant about hiring new employees,” says Klaus Wohlrabe from the Munich Ifo Institute.

The economic researchers' employment barometer fell from 95.5 points to 94.9 points from January to February.

Wohlrabe said: “The reduction of jobs is no longer ruled out.”

According to Ifo, in industry, for example, the signs continue to point to staff cuts, but also for retail.

The weak consumption development is particularly a problem for stationary retail.

Current business should be managed with fewer staff; the difficult situation in construction is also reflected in employee development.

However, the willingness to hire IT service providers and consultants remains unbroken.

apr/dpa