| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Index | -25.8 | -24.2 | -27.4 | -27.3 |
Highlights
GfK's survey found confidence rising surprisingly sharply following a marginally larger gain at the start of the quarter. The climate indicator this month was nudged a tick firmer to minus 27.3 and in May is expected to climb more than 3 points to minus 24.2, some 1.6 points above the market consensus and a 2-year high. However, both values remain historically weak.
The improvement in April in part reflected more robust income expectations which rose fully 12.2 points to 10.7, their strongest reading since January 2022. Economic expectations were also up 3.8 points at 0.7, their best print since July last year but still 13.6 points below their mark in April 2023. Similarly, a 2.7 point gain in buying intentions left the sub-index 13.1 points lower on the year and even further below its level prior to the pandemic lockdowns.
In sum, while the trend in consumer confidence continues to be in the right direction, absolute levels remain too weak to signal any meaningful near-term recovery in household spending. That said, today's report lifts the German RPI to a solid 42 and the RPI-P to an even higher 52. Both measures show recent overall economic activity running well ahead of forecasts.
The improvement in April in part reflected more robust income expectations which rose fully 12.2 points to 10.7, their strongest reading since January 2022. Economic expectations were also up 3.8 points at 0.7, their best print since July last year but still 13.6 points below their mark in April 2023. Similarly, a 2.7 point gain in buying intentions left the sub-index 13.1 points lower on the year and even further below its level prior to the pandemic lockdowns.
In sum, while the trend in consumer confidence continues to be in the right direction, absolute levels remain too weak to signal any meaningful near-term recovery in household spending. That said, today's report lifts the German RPI to a solid 42 and the RPI-P to an even higher 52. Both measures show recent overall economic activity running well ahead of forecasts.
Market Consensus Before Announcement
Consumer climate is expected to rise to minus 25.8 in May's report after a preliminary minus 27.4 in April. This index has been improving but remains historically weak.
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.
