BERLIN (Reuters) – German consumer sentiment is set to barely change in December as government energy measures help stabilize morale at a level that is just above a record low set two months earlier and still signals declining consumption, a GfK institute survey showed on Friday.
The institute said its consumer sentiment index rose to negative 40.2 heading into December from a reading of negative 41.9 in November, and below forecasts from analysts polled by Reuters of negative 39.6.
October marked the lowest reading in over a decade at negative 42.8.
A negative reading suggest a year-on-year drop in private consumption.
“The long-lasting fear of consumers regarding exploding energy prices has currently weakened somewhat, which has a slightly positive effect on the consumer climate,” said GfK consumer expert Rolf Buerkl.
While a one-off gas relief payment for households in December and a cap on gas and electricity prices next year helped improve the mood, the situation remains tense and there will not be any significant, sustainable recovery in morale as long as energy supply doubts remain, added Buerkl.
The subindex measuring willingness to buy was the only one to fall in November, dropping to -18.6 from -17.5 in October, as consumers are still putting aside money in anticipation of exploding energy bills in the coming months, said the GfK.
Prices portal Verivox said last week that many German households face another 50%-plus hike in power and gas costs in January due to the lag in suppliers passing on higher wholesale market prices and rising grid fees.
DEC 2022 NOV 2022 DEC 2021
Consumer climate -40.2 -41.9 -1.8
Consumer climate components NOV 2022 OCT 2022 NOV 2021
– willingness to buy -18.6 -17.5 9.7
– income expectations -54.3 -60.5 12.9
– business cycle expectations -17.9 -22.2 31.0
NOTE – The survey period was between Nov. 3 and Nov. 14, 2022.
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.
The “willingness to buy” indicator represents the balance between positive and negative responses to the question: “Do you think now is a good time to buy major items?”
The income expectations sub-index reflects expectations about the development of household finances in the coming 12 months.
The additional business cycle expectations index reflects the assessment of those questioned of the general economic situation in the next 12 months.
(Reporting by Miranda Murray; Editing by Tomasz Janowski)