Germany: Consumer sentiment expected to be hard hit in January by new lockdown
December 22, 2020
Sentiment among German consumers is expected to drop to minus 7.3 in January from December’s minus 6.8 as the new lockdown is projected to bite. Consequently, the expected value for January is the lowest since July 2020.
Backward-looking data for December, which was released at the same time and underpins the projected January value, sent mixed signals, however. Economic expectations and propensity to buy rose from the prior month, while income expectations moderated. Views on the economy improved, but the impact of the hard lockdown has likely been excluded as the survey ran from 3 December until 14 December. Moreover, the lockdown could see an increase in short-term work due to the closure of shops, which would weigh on income levels. Consequently, the outlook on consumers’ willingness to buy is also uncertain.
Rolf Bürkl, consumer expert at GfK, commented that “with the hard lockdown and the closure of most stores, the consumer climate is faced with yet another setback."
Author: Jan Lammersen, Economist