Dusseldorf Full storage facilities, falling gas and oil prices and debt-financed economic stimulus measures by the federal government have improved the mood in the German economy. Consumers are also more optimistic again, as the HDE consumption barometer shows.
This reached a five-month high for December at 87.8 points. The barometer is calculated monthly by the Handelsblatt Research Institute (HRI) for the trade association HDE; it is based on a representative survey of around 1,600 households.
HRI President Bert Rürup said: “It probably won’t be quite as empty, cold and dark under the Christmas tree as some pessimists fear.”
All individual components of the HDE barometer are pointing upwards for December. Expectations for the economy and income are rising by leaps and bounds, the propensity to buy is increasing and fears of inflation are falling. The propensity to save remains at a high level; the majority of consumers are therefore willing to finance part of their consumption by forgoing savings or even by liquidating reserves.
This is also necessary in order to be able to maintain the usual level of consumption, at least to some extent. According to the Federal Statistical Office, nominal wages rose by 2.3 percent in the third quarter compared to the same quarter of the previous year.
help for consumers
But in the same period, consumer prices rose by 8.4 percent. As a result, employees had to accept a drop in real wages for the fourth quarter in a row – so inflation is destroying purchasing power.
According to HRI estimates, the consumer price level should increase by around 18 percent within three years; for comparison: in the phase before that, it took about 14 years, from 2006 to 2020, until the price level rose by a similar amount.
In order to shield citizens from this loss of prosperity, the government has so far decided on three aid packages, the volume of which the Ifo Institute puts at a total of around 135 billion euros.
In addition, there are the gas and electricity price brakes, which should also bring relief in the double-digit billions – and further increase the national debt. Commerzbank chief economist Jörg Krämer said: “With the extensive relief packages, the state is largely taking over the higher costs for imported energy.”
Debt-financed economic stimulus support from the federal government has improved the mood in the German economy.
(Photo: dpa)
The labor market is considered to be the most important pillar for private consumption – even if the crisis is leaving its first traces here. The situation is “overall stable,” said BA board member Daniel Terzenbach on Wednesday at the presentation of the monthly report from the Federal Employment Agency (BA).
>> Read here: “Recession is likely to be less deep than many expected” – Ifo index rises surprisingly significantly
However, seasonally adjusted unemployment and underemployment have risen again. Short-time work is also increasing again. According to projections by the Ifo Institute, the number of spa workers rose from 76,000 to 187,000 from August to November.
employment continues to rise
The growth occurred primarily in industry. “In particular, the energy-intensive industries and the automotive industry are increasingly resorting to short-time work. This is in line with the recent weakness in production in these sectors,” said Ifo expert Sebastian Link.
Short-time work in industry increased in particular.
(Photo: dpa)
Regardless of the macroeconomic turbulence, employment continues to rise. According to the latest data for October, around 45.7 million people resident in Germany were employed.
This means that the seasonally adjusted number of people in employment rose by 32,000 compared to the previous month. In its most recent projection, the federal government assumes that employment will peak in 2024 with an average of 45.78 million. From there, it is likely to fall by around 130,000 per year as the baby boomers now retire and need to be replaced by far smaller cohorts in the labor market.
The change in sentiment has not yet made itself felt in the retail sector. According to the most recent data, retail companies’ real turnover in October was 2.8 percent less than in the previous month after calendar and seasonal adjustments.
Compared to the same month last year, real sales were down five percent. Due to the good start to the year, there is still hope in retail that 2022 could be another record year. In the first ten months, the real increase in sales was 0.5 percent.
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The retail trade in textiles, clothing, shoes and leather goods as well as department stores have recorded high growth in the course of the year to date. Real sales of food, beverages and tobacco goods as well as online and mail order sales fell significantly. The retail trade in furnishings, household appliances and building supplies had to cope with a severe slump.
Sales development before Christmas
Retailers have mixed feelings about the ongoing Christmas business. According to the current HDE trend survey, 51 percent of the retail companies surveyed rated the sales development in the week before the first Advent as unsatisfactory.
Around 30 percent of those surveyed, on the other hand, reported good development and satisfaction with sales. According to the HDE, this applies in particular to trading companies in the consumer electronics, cosmetics and food sectors. The most popular products included smartphones, Christmas decorations, sweaters and knitwear, jewelery and vouchers.
>> Read here: High inflation and no corona restrictions – Germans save less
HDE General Manager Stefan Genth said: “The Christmas business is under the impact of the energy crisis.” The HDE expects total sales of more than 120 billion euros for November and December. That would be a nominal plus of 5.4 percent over the previous year, but after deducting rising prices, a real minus of four percent.
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