| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Index | -27.9 | -27.4 | -29.0 | -28.8 |
Highlights
The March survey revised confidence marginally firmer at quarter-end and forecasts another slight improvement in April. The climate indicator this month was nudged a couple of ticks higher to minus 28.8 while April is expected to climb to minus 27.4, slightly stronger than the market consensus. However, both values remain historically weak.
The improvement in March in part reflected stronger income expectations which rose 3.3 points to minus 1.5. This was their highest reading since February 2022, before the war in Ukraine began. Economic expectations were also up 3.3 points at minus 3.1. However, they were still 6.8 points below their level a year ago. Moreover, the willingness to buy dipped 0.3 points to minus 15.3, an increase of only 1.7 points versus March 2023.
In sum, while the trend in consumer confidence would seem to be moving slowly in the right direction its absolute level remains too weak to signal any near-term recovery in household spending. That said, today's report lifts the German RPI to 25 and puts the RPI-P at a solid 45. Both measures suggest that the current downswing in overall economic activity is somewhat less marked than previously predicted.
The improvement in March in part reflected stronger income expectations which rose 3.3 points to minus 1.5. This was their highest reading since February 2022, before the war in Ukraine began. Economic expectations were also up 3.3 points at minus 3.1. However, they were still 6.8 points below their level a year ago. Moreover, the willingness to buy dipped 0.3 points to minus 15.3, an increase of only 1.7 points versus March 2023.
In sum, while the trend in consumer confidence would seem to be moving slowly in the right direction its absolute level remains too weak to signal any near-term recovery in household spending. That said, today's report lifts the German RPI to 25 and puts the RPI-P at a solid 45. Both measures suggest that the current downswing in overall economic activity is somewhat less marked than previously predicted.
Market Consensus Before Announcement
Currently trending sideways, consumer climate is expected to rise to minus 27.9 in April's report after a preliminary minus 29.0 in March.
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.
