Consumer Confidence Returns as Covid-19 Infection Rates Fall 

Consumer confidence up for fifth consecutive month

Consumer confidence increased for the fifth month in succession in July according to the German Retail Federation (HDE). Falling Covid-19 infection incidence rates and the relaxing of measures designed to contain the coronavirus have contributed to help record the highest consumer confidence level in two years. 

Buying propensity levels picking up

According to the HDE, consumer buying propensity levels are also up with consumer demand now being met with corresponding consumption opportunities in the retail, food service and tourism sectors. Increased willingness to spend is also the result of improved income expectations among the buying public. 

Unemployment levels continue to fall

The country’s labor market has also recorded continued improvement during the summer months according to the Federal Employment Agency (BA). Companies continue to reduce their use of the short-time work scheme and are recruiting new employees again. The seasonally adjusted figures for June show a fall of 38,000 in the numbers of unemployed, with the unemployment rate decreasing by two percentage points to 5.7 percent. According to BA preliminary extrapolated data, cyclical short-time working benefits were paid to around 2.3 million employees this month, with utilization of the scheme continuing to decline.

Economic outlook optimistic

The outlook for the economy as a whole has been optimistic for several months, with consumers and economic research institutes alike backing up this assessment. The HDE Consumer Barometer is a monthly survey forecast compiled from the responses of 2,000 respondents.