Consumer sentiment in Germany fell noticeably in November for the first time in twelve months following some stabilisation in the economy, according to the latest German Trade Association (HDE) consumption barometer.
The decline in the consumption barometer, a first since October 2022, indicates that consumers are decoupling from the gradual stabilisation in the economy, the HDE added.
Although the barometer is still noticeably higher than a year ago, the decline signifies the erosion of recovery in the summer months.
As a result, private consumption is no longer expected to stimulate growth in the current year, the HDE noted.
Effectively, the consumption barometer is at the same level as in May of this year and well below pre-pandemic levels.
The HDE attributed this uncertainty to the geopolitical situation in the Middle East and added that people in Germany are planning to spend less and save more.
HDE Consumption Barometer
The HDE consumption barometer, which is published on the first Monday of each month, is based on a monthly survey of 1,600 people on their propensity to buy, propensity to save, financial situation and other consumption-related factors.
The consumption barometer, which is compiled by the Handelsblatt Research Institute (HRI) on behalf of the HDE, serves as an indicator for private consumption. It does not reflect current consumer behaviour, but rather the expected mood over the next three months.
In October 2023, consumer sentiment in Germany saw a slight increase compared to the previous month and reached the level it stood at the beginning of 2022 before Russia's invasion of Ukraine.
