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German Consumer Morale Picks Up On Income Expectations: GfK

By Reuters
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German Consumer Morale Picks Up On Income Expectations: GfK

German consumer sentiment is set to pick up in May as moderating energy prices and expected wage increases help to dissipate households' initial fears about a loss in purchasing power, a GfK institute survey has shown.

The institute's consumer sentiment index improved to -25.7 heading into May from a slightly upwardly revised -29.3 in April, the seventh increase in a row and above expectations of analysts polled by Reuters of a reading of -27.9.

Below Pre-Pandemic Levels

Sentiment is back on track to recovery after a slowdown last month, but "the value still remains below the pre-pandemic level of about three years ago," said GfK consumer expert Rolf Buerkl.

"On a more positive note, income expectations are also up for the seventh consecutive month, returning to pre-Ukraine war levels for the first time," added Buerkl.

The income expectations subindex rose to -10.7 from -24.3 the month before, marking the highest value since February 2022, and comes as workers press for more pay and better working conditions to tackle higher costs of living through strikes.

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The consumer climate indicator forecasts the development of real private consumption in the following month.

An indicator reading above zero signals year-on-year growth in private consumption. A value below zero indicates a drop compared with the same period a year earlier.

According to GfK, a one-point change in the indicator corresponds to a year-on-year change of 0.1% in private consumption.

Read More: Top 10 Supermarket Retail Chains In Germany

News by Reuters, edited by ESM. For more A-Brands news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.

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