The survey results published by GfK Group and the Nuremberg Institute for Market Decisions (NIM) showed that the forecast consumer sentiment index for May rose to -24.2 points from -27.3 points in April (revised from -27.4 points). Economists had expected an increase to -25.9 points. The May value was the highest since April 2022.
“The sharp rise in consumer sentiment was mainly due to a marked increase in income expectations. Our analyses indicate that income expectations are primarily based on real income development. And the signals here are definitely positive. Rising wages and salaries combined with a recent decline in the inflation rate form the foundation for increasing purchasing power among private households," said Rolf Bürkl, consumer expert at NIM.
GfK said that in April, the willingness to save component increased by 2.5 points to 14.9 points. This component was at just 1.8 points in the same period the previous year, which represents an increase of more than 13 points. Meanwhile, the income expectations component increased by 12.2 points to 10.7 points. The last time it reached a higher level was in January 2022 (16.9 points). In total, the income indicator has already improved by more than 30 points since the beginning of the year due significant real income growth. The willingness to buy component increased by 2.7 points to -12.6 points. However, it continues to be at an extremely low level. In addition to rising prices, it is mainly the pronounced uncertainty among consumers that is causing private households to put their financial resources aside and invest less in consumption. Meanwhile, the economic expectations indicator rose by 3.8 points, to 0.7 points (the highest value since July 2023). However, compared to April 2023, the index fell by 13.6 points.