German consumer sentiment is expected to tumble in the last month of the year, breaking a streak of increases as households, confronted by reports of job cuts, grow more pessimistic about their income prospects, a survey showed today.
The consumer sentiment index, published by GfK and the Nuremberg Institute for Market Decisions (NIM), fell significantly more than expected going into December, to -23.3 points from a slightly revised down -18.4 points the month before.
Analysts polled by Reuters had expected a reading of -18.6.
The December figure marks the lowest point for consumer sentiment since May, when it was -24 points, and is similar to the comparatively low level seen at the end of last year.
"The last few weeks of the year are ending with a significant setback in the consumer climate," said NIM analyst Rolf Buerkl.
"The reasons for this are certainly the job cuts reported by industry and the relocation of production abroad. In addition, the number of bankruptcies has recently increased," he said.
"In short, consumer climate remains at rock bottom," he added.
Big-name companies, such as Bayer, Volkswagen and Thyssenkrupp, have announced job cuts in recent months as Europe's largest economy has struggled to recover.
Consumers' initial hopes for an economic recovery have gradually dissipated over the year, with the indicator on the expectations for the next 12 months declining for a fourth month in a row to its lowest value since February, the survey showed.
That tracks with the government's forecast for a 0.2% economic contraction in 2024, marking a second year of decline and cementing Germany's place as a laggard among its large euro zone peers.
The survey period was from October 31 to November 11, 2024.
