Germany Consumer Confidence July 2019

Germany

Germany: Consumer confidence drops to over two-year low in July

June 26, 2019

German consumer confidence dipped to an over two-year low of 9.8 in July from 10.1 in June; July’s result marked the second consecutive month of falling consumer sentiment. Meanwhile, backward-looking data for June showed a diverging trend.

Economic expectations bounced back somewhat in June, however remained far below the level recorded in the same month a year ago. Economic expectations are suffering from cooling global economic momentum, the Brexit mystery, and the trade war. These factors have weighed on Germany’s important export-oriented sectors and thereby cloud the economic outlook. Income expectations dropped at a quick pace in June as the job market is very tight which could mean that an end to the employment boom is forthcoming: anecdotal evidence hints at fears about job security. This is particularly the case in the automotive sector, which is feeling the pinch from trade conflicts and a slowing global economy as well as “the transition from the combustion engine to e-mobility.” Moreover, the noticeable slowdown in the Chinese economy, which grew at a 27-year soft pace in Q2, further dims the prospects for the automotive sector. Despite the seeming gloom and doom, propensity to buy rose in June.

FocusEconomics Consensus Forecast panelists expect private consumption to expand 1.3% in 2019, which is down 0.1 percentage points from last month’s estimate. For 2020, panelists see private consumption growing 1.6%.


Author:, Economist

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Germany Consumer Confidence July 2019 0

Note: GfK Consumer Climate Index.
Source: The GfK Group.


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