German consumer confidence showed a slight improvement towards the year's end and is predicted to rise further in January, according to data released jointly by the market research group GfK and the Nuremberg Institute for Market Decisions on Thursday.
The consumer sentiment index, which is forward-looking, improved to -21.3 for January, compared to -23.1 in December. Analysts had anticipated a rise to -22.6.
Nonetheless, a long-term rebound in consumer confidence remains elusive due to persistent consumer uncertainty, highlighted by NIM's consumer expert Rolf Bürkl. "High food and energy prices remain the primary factors, alongside increasing concerns over job security in various sectors," Bürkl stated.
Ongoing discussions regarding job reductions, plant closures, and the potential relocation of production overseas continue to stoke anxiety within the labor market.
December saw an uplift in income and economic expectations, along with an increased willingness to buy, while the propensity to save significantly declined.
The economic expectations index saw stabilization after dropping for four consecutive months, rising to +0.3 from November’s -3.6.
While the decline in confidence has paused, consumers are yet to perceive any lasting economic recovery, according to GfK. Research institutions predict negligible growth, at best, for the forthcoming year.
Income expectations showed some recovery following a significant drop in November, with the index increasing to +1.4 from -3.5.
However, despite this improvement, the score continues to lag behind the levels observed in the summer. Lowered growth forecasts and climbing unemployment rates hinder a more pronounced recovery in income expectations.
The willingness to buy continued its upward trajectory in December, with the indicator reaching -5.4, an improvement from the previous period’s -6.0.
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