The propensity to buy of German consumers is “in freefall,” according to the think tank GfK.
Hit by strict Covid-19 related lockdowns, consumer confidence in Germany is seen falling to -15.6 in February from -7.5 in January, which was revised from an original reading of -7.3.
“The closure of the restaurant trade and large portions of the retail sector in mid-December 2020 has had a similarly damaging effect on consumer spending as that of the first lockdown last spring. At present, propensity to buy is at zero points. This is a decrease of 36.6 points on the previous month, which is comparable to the drop of 36 points recorded during the first lockdown in April 2020,” explained Rolf Bürkl, consumer expert at GfK.
The extension of lockdown measures has dashed hopes of a speedy recovery for consumer sentiment, GfK added.
“Consumer sentiment is facing difficult challenges in the first quarter of this year. If it is to recover sustainably, infection rates will need to decrease more than they have to date so that the measures can be relaxed significantly. This means that we will need to wait a while before we see the recovery that many had been hoping for this year,” Bürkl commented.
The German government recently agreed with the federal states on a further extension until Feb. 14 of a lockdown for retailers that sell non-essential products. The lockdown was previously due expire at the end of January.