The latest consumer barometer by the German Retail Association (HDE) indicates that there will be 'no imminent recovery' in private consumption after disappointing figures in August.
The barometer shows that although consumer sentiment had recently stalled, it stagnated in August, lowering expectations about a recovery in consumption levels.
Private Consumption
The HDE consumer barometer, which is published on the first Monday of each month, is based on a monthly survey of 1,600 German individuals on their propensity to buy, their propensity to save, their financial situation and other factors relevant to consumption.
Produced by the Handelsblatt Research Institute (HRI) on behalf of the HDE, it serves as an indicator for private consumption.
The latest research indicates that consumers' propensity to buy also remains unchanged compared to the previous month. Meanwhile, their propensity to save is increasing.
The association noted that this has resulted in a further shift from consumption to saving.
Furthermore, the HDE claims consumers are planning to intensify their savings efforts and that this development was already apparent at the beginning of the year.
'Precautionary Saving'
The barometer shows the savings rate was above the level of the corresponding quarter last year.
The HDE noted that the 'mixed economic situation' and rising unemployment could further reinforce the trend towards 'precautionary saving.'
The association noted stimulus for private consumption is therefore not to be expected in the next few weeks.
'Consumers are strengthening their financial reserves and are very cautious about consumption,' according to the HDE. 'Against this background, private consumption is unlikely to recover for the time being and will no longer be a driver of economic growth.'
