- buyer enthusiasm for purchasing spirits remains muted
In Germany, folks are more focused than ever on job stability and income. Saving is the new mantra post-election, as predicted by experts. The general vibe among consumers remains grim, with a tiny bump in economic anticipation in February as per the latest consumer sentiment survey by GfK and NIM, yet a dip in income expectations and purchase propensity, alongside an increase in the saving tendency.
For March 2025, experts forecast a decline in consumer sentiment by 2.1 points, reaching -24.7 points. This represents the lowest point since the data was first recorded in 1980, with values typically hovering around +10 points before the corona pandemic.
Uncertainty and fear of job loss are the primary drivers. "Since mid-last year, consumer sentiment has been stationary at a low level," observed NIM consumer expert Rolf Bürkl. "There's a persistent unease among consumers, and a lack of financial predictability."
The formation of a fresh government and approval of a budget for this year could shift this gloomy outlook, according to Bürkl. "A new government and budget would provide essential foundations, making consumers more inclined to spend and stimulate consumption."
For substantial purchases, consumers are exercising caution. Factors such as corporate bankruptcies, threatened factory closures, relocated production, and industry job cuts in Germany have fed consumers' apprehension about their own employment. Moreover, weak income expectations have driven the purchase propensity to its lowest level since June 2024.
Key elements affecting consumer sentiment and job security in Germany include economic uncertainty, high living expenses, political instability, and job market concerns. The new government and budget could potentially positively impact these factors through policy initiatives, swift budget approval, economic stimulus packages, and political stability. However, the success of these measures depends on the government's ability to tackle structural economic challenges effectively and propose credible solutions.
What factors have contributed to the cautious approach towards substantial purchases by German consumers? The uncertainty surrounding corporate bankruptcies, factory closures, and industry job cuts have fueled consumers' apprehension about their employment. Furthermore, weakening income expectations have resulted in a low purchase propensity, reaching its lowest level since June 2024.
In the shadow of 2024, German consumers have shown increased savings tendency due to uncertainties associated with their job security. As the general atmosphere remains gloomy, the expert forecasts a further decline in consumer sentiment by 2.0 points in March 2025, plunging to a record low since 1980.
Despite the grim outlook, some hope is instilled by the potential formation of a fresh government and approval of a budget this year. Experts propose that these developments could make consumers more inclined to spend and stimulate consumption, reversing the trend of increased savings and decreased purchase propensity.
