German consumer sentiment down in August

Germany’s consumer sentiment has sharply declined in August, reversing the previous month’s recovery. The GfK Consumer Climate, in partnership with the Nuremberg Institute for Market Decisions (NIM), reports a drop of 3.4 point to -22.0 points, compared with -18.6 points in July.

Key factors contributing to this downturn include a notable decline in income expectations, which fell by 16.2 points to 3.5 points—the largest drop since September 2022. This decline, coupled with rising concerns over job security and a slight increase in the willingness to save, has dampened overall consumer sentiment.

The willingness to buy has also been impacted, falling to -10.9 points despite a 6-point increase from the previous year. Economic expectations have fluctuated, with a 7.8-point drop to 2.0 points in August following a rise the previous month.

Rolf Buerkl, a consumer expert at NIM, suggests that the temporary boost in consumer confidence from the European Football Championship has faded, exacerbated by growing concerns over job security, rising unemployment rates, and economic instability.