HDE Consumer Barometer May: Political and economic uncertainty causes consumer sentiment to stagnate

HDE Consumer Barometer May: Political and economic uncertainty causes consumer sentiment to stagnate

After recently improving somewhat, consumer sentiment in Germany has failed to recover further in May. This is evident from the currently stagnating consumer barometer of the German Retail Association (HDE).

Thus, while international trade policy developments have not initially had any additional negative impact on consumer sentiment, the plans outlined in the coalition agreement by the new federal government have not sparked any noticeable optimism. Consumers are therefore continuing to adopt a wait-and-see attitude.

In recent weeks, the number of worse economic forecasts has increased, along with trade policy turbulence caused by the announcement and suspension of tariffs by the USA.

Nevertheless, consumers are not significantly more negative about economic developments in the coming months.

Their economic expectations are roughly at the same level as the previous month, but at the same time are below the level of the same month last year.

Consumers don't yet seem to believe that the new federal government's initial measures will quickly boost the overall economy. To create optimism and increase consumer activity, the new federal government must address this uncertainty.

It is up to federal policymakers to quickly create growth prospects, make consumers more optimistic about the future, and positively influence private consumption and thus the overall economy.

Consumers' income expectations show a minimal increase compared to the previous month. The expected additional income is apparently expected to flow into both consumption and savings, increasing consumers' propensity to buy and save.

The recent trend of declining consumer restraint is thus not continuing, but rather weakening somewhat. Accordingly, there are still no signs of an imminent and noticeable recovery in private consumption.

The HDE Consumer Barometer, which is published on the first Monday of each month, is based on a monthly survey of 1,600 people on their propensity to buy, propensity to save, financial situation and other consumption-related factors. The consumption barometer, which is compiled by the Handelsblatt Research Institute (HRI) on behalf of the HDE, serves as an indicator for private consumption. It does not reflect current consumer behaviour, but rather the expected mood over the next three months.