German consumer confidence improves, but macro outlook worsens

A survey gauging consumer sentiment in Germany improved more than expected this month, but confidence still remains well below the historic average as declining economic expectations continue to cloud the long-term outlook.

The forward-looking GfK consumer climate index for October rose by 0.7 points to -21.2, up from a revised -21.9 in September.

However, with Germans showing a renewed willingness to save – with the sub-index for that measure rising by 1.3 points – the consumer climate remains relatively gloomy.

The overall outlook has benefitted from improved income expectations and a slightly less pessimistic willingness to buy, GfK said on Thursday. But economic expectations fell for the second straight month, with the indicator declining 1.3 points to 0.7.

GfK said a slight rise in unemployment, increased corporate insolvencies and announcements by various companies that they are cutting jobs or relocating parts of their business abroad "have certainly increased job worries among a number of employees".

“After the severe setback in the previous month, the slight improvement in consumer climate can be interpreted more as a stabilization at a low level," said Rolf Bürkl, consumption expert at the Nuremberg Institute for Market Decisions (NIM), which publishes the monthly survey alongside GfK.

"The consumer climate has not improved since June 2024, when it hit -21 points. Therefore, the slight increase cannot be interpreted as the beginning of a noticeable recovery. The consumer sentiment is generally too unstable for that,” Bürkl said.