| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Index | -28.8 | -29.0 | -29.7 | -29.6 |
Highlights
The February survey revised confidence marginally firmer in mid-quarter and forecasts another slight improvement in March. The climate indicator this month was nudged a tick firmer to minus 29.6 while March is expected to climb to minus 29.0, just marginally softer than the market consensus. However, both values remain historically weak.
Economic expectations rose 0.2 points to minus 6.4 in February but were still some 12.4 points short of their level a year ago. Income expectations fared much better, increasing from minus 20.0 to minus 4.8, a near-23 point gain versus February 2023. Even so, the willingness to buy dipped 0.2 points to minus 15.0 and now stands only 2.3 points stronger on the year.
In sum, the latest results offer little hope of any near-term rebound in household spending. Confidence at least now looks to be trending broadly sideways but current levels are well below the long-run average and taken at face value suggest consumption is set to stay very sluggish for some time yet. More generally, today's update puts the German RPI at minus 20 and the RPI-P at minus 23, both readings pointing to downside risk to economic activity in general.
Economic expectations rose 0.2 points to minus 6.4 in February but were still some 12.4 points short of their level a year ago. Income expectations fared much better, increasing from minus 20.0 to minus 4.8, a near-23 point gain versus February 2023. Even so, the willingness to buy dipped 0.2 points to minus 15.0 and now stands only 2.3 points stronger on the year.
In sum, the latest results offer little hope of any near-term rebound in household spending. Confidence at least now looks to be trending broadly sideways but current levels are well below the long-run average and taken at face value suggest consumption is set to stay very sluggish for some time yet. More generally, today's update puts the German RPI at minus 20 and the RPI-P at minus 23, both readings pointing to downside risk to economic activity in general.
Market Consensus Before Announcement
Consumer climate is expected to rise to minus 28.8 in March's report after a nearly 5-point unexpected fall to minus 29.7 in February.
Definition
GfK's consumer climate survey asks around 2,000 German consumers every month about their assessment of economic conditions. The questions focus on economic and income expectations and consumers' willingness to buy. Having calculated the differences between the positive and negative responses for each question the results are synthesized into a single number that reflects overall consumer expectations for the coming month.
Description
Any insight into household expenditure is vital to understanding how the economy as a whole is shaping up. The monthly correlation between the GfK consumer gauge and actual spending is not especially high but trends in the index can offer useful information about potential underlying developments in consumer behavior. As a forward looking indicator, the GfK index is one input used by analysts in the construction of their forecasts of future German retail sales.
