German consumer confidence is set to deteriorate in February under the strict lockdown restrictions, survey results from the market research group GfK showed on Wednesday.
The forward-looking consumer sentiment index dropped 8.1 points to -15.6 in February from -7.5 in January. The expected reading was -7.9.
“The closure of the restaurant trade and large portions of the retail sector in mid-December 2020 has had a similarly damaging effect on consumer spending as that of the first lockdown last spring,” Rolf B?rkl, consumer expert at GfK, said.
The recent decision to extend the strict lockdown measures dashed hopes of a speedy recovery for consumer sentiment, the research group noted.
Propensity to buy fell sharply, while economic and income expectations logged moderate declines in January.
The economic expectations index fell only 3.1 points to 1.3 in January. The stable trend partly reflects the stability of the labor market in the light of the deep recession, and also to the fact that the manufacturing sector, a substantial part of the German economy, has remained unaffected by closures.
The income expectations declined 6.5 points to -2.9. This was the fourth such fall for the fourth consecutive month.
The market research group noted that the extension of the lockdown to mid-February has also made it more likely that the industries affected will be hit by a wave of bankruptcies. This was fueling fears of job losses among employees, which in turn is affecting income expectations.
The propensity to buy index plunged 36.6 points from the previous month to zero in January.
The survey was conducted between January 7 and 18. The results are extracted from the “GfK Consumer Climate MAXX” study and are based on around 2,000 consumer interviews per month conducted on behalf of the European Commission.