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Brexit halts upward trend in German consumer climate

28 Jul '16
4 min read


According to the report, while economic and income expectations suffered marked losses this month, the Germans' appetite for consumption remains unabated. The propensity to buy indicator even gained a point, climbing to 55.4 points. This puts it at exactly the same level as this time last year.

It would seem that Brexit cannot affect the propensity to consume in the long term. This is surprising at first glance, especially given the decline in income expectations. At second glance, however, this seems very plausible. While the Germans expect Brexit to negatively impact the German labour market in general, when asked whether they believe their own workplace to be at risk, the vote was clear: 95 per cent of employees said they are not currently worried about their job. Just 3 per cent are inclined to believe their jobs are at risk.

This supports the theory that GfK has already voiced several times: Propensity to consume – especially for larger purchases – depends considerably on whether employees are worried about their jobs. Job security creates certainty with which consumers can plan for the future, and this is a decisive aspect, especially for larger purchases for which consumers may need a loan, tying them down financially in the long term. (SH)

Fibre2Fashion News Desk – India

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