Many people in Germany are currently spending more money because they are afraid of rising prices. This is the result of a study by the Nuremberg consumer research company GfK. The desire to buy leads to a consumer climate that is better than it has been since April 2020.
The weaker expectations with regard to private household incomes and the general economy could therefore not affect the current positive mood. Compared to the previous month, there was once again a slight improvement overall. “The German citizens apparently expect further price increases. That is why they consider it advisable to bring forward purchases in order to avoid even higher prices,” said GfK consumer expert Rolf Bürkl. “Should the price increase persist, however, this would put a strain on the consumer climate and a fundamental recovery is likely to be delayed further.”
While the propensity to buy is currently increasing and the propensity to save is falling, people are also becoming increasingly skeptical about household income and the general economic situation. The latter is mainly due to production losses in the automotive industry, for example. Important raw materials such as computer chips are missing there. Some of the production facilities have been shut down, and many employees fear short-time work.
In addition, the prices of German manufacturers are currently climbing from record to record, mainly due to expensive energy. Most recently, they rose by 14.2 percent in September, the highest rate for almost 47 years. Due to the significantly higher prices for oil, gas and some groceries such as coffee, German imports have also risen by 17.7 percent, more than they have been for more than 40 years. Producer and import prices are seen as precursors to inflation. At 4.1 percent, this is already as high as it was last in 1993 and, according to economists, could move in the direction of five percent in the future.
“Inflation is likely to remain a big issue in 2022,” said LBBW analyst Jens-Oliver Niklasch. It is exciting to see how strong the effect will be on goods for private consumption. The future federal government is likely to be preoccupied with the future federal government for a longer period of time, according to Niklasch. He referred to the latest proposals on heating surcharges or a higher commuter allowance because heating and refueling have recently become significantly more expensive.
All in all, consumer sentiment is currently above the level of the previous year, according to consumer researcher Bürkl: “The good level shows that consumers remain confident about the recovery of the German economy.”
GfK researchers conducted 2,000 consumer interviews between September 30 and October 11. The study is part of a long-term study commissioned by the EU Commission.