FX.co ★ German Consumer Sentiment To Hit 31-Month High In November

Germany's consumer confidence is poised for a notable rebound in November, achieving the highest level in over two-and-a-half years, as indicated by a recent survey conducted by the market research group GfK in collaboration with the Nuremberg Institute for Market Decisions (NIM). The survey, released on Tuesday, highlights a consecutive improvement in both income expectations and purchasing willingness.

The consumer sentiment index, which is forward-looking, advanced to -18.3 in November, up from a revised figure of -21.0 in October. This represents the most elevated level since April 2022, although the overall consumer climate remains subdued, as noted by GfK.

However, German households have expressed increased pessimism regarding the broader economic outlook. The income expectations index climbed by 3.6 points to reach 13.7 points, reflecting a slightly improved optimism about their household's financial prospects over the next year.

Additionally, the index measuring the willingness to buy enhanced by 2.2 points, landing at -4.7, marking its highest point in over two and a half years. Conversely, economic expectations dipped slightly by 0.5 points, settling at 0.2.

Despite these positive movements, the persistently weak consumer climate, influenced by crises, conflicts, and rising prices, continues to stifle factors such as real income growth that could otherwise boost consumption, according to Rolf Bürkl, a consumer expert at NIM.

"Reports of an increasing number of company insolvencies, alongside plans to cut jobs or relocate production overseas, are also hindering a more substantial recovery in consumer sentiment," Bürkl added.