Consumer confidence in Germany is set to recover modestly in November, after falling in October to an all-time low.
Market research group GfK’s forward-looking consumer-sentiment index forecasts confidence rising to minus 41.9 in November from a revised figure of minus 42.8 in October. November’s figure is above a forecast from economists polled by The Wall Street Journal of minus 42.0.
“It is certainly too early to speak of a trend shift at this time,” GfK’s consumer expert Rolf Buerkl said. He added that the situation remains very tense for consumer sentiment.
Mr. Buerkl explained that inflation has recently risen to 10% in Germany, and concerns about the security of energy supplies continue to rise. “Therefore, it remains to be seen whether the current stabilization will last or whether, considering the upcoming winter, there is reason to fear a further worsening of the situation,” he said.
GfK uses data from subindexes from the current month to derive a sentiment figure for the coming month. While economic expectations suffered minimal losses, both income expectations and propensity to buy increased.
Economic expectations fell to minus 22.2 in October from minus 21.9 in September. “Consumers expect the German economy to slip into recession,” GfK said.
Income expectations, however, increased slightly to minus 60.5 from its historic low of minus 67.7 in September.
“Exploding energy and food prices are reducing the purchasing power of private household and are responsible for the persistent pessimism surrounding incomes,” GfK said.
After eight successive declines, the propensity to buy index is currently gaining slightly again, rising to minus 17.5 in October from minus 19.5 in September.
“Consumer sentiment won’t be able to recover noticeably and sustainably as long as inflation remains high and there are doubts about unrestricted energy supplies,” Mr. Buerkl said.
Write to Maria Martinez at [email protected]
