German consumer morale improves slightly, job fears remain high: GfK

(C) Reuters. General view inside of shopping mall ‘Pasing Arcaden’ in Munich

BERLIN (Reuters) – German consumer morale improved slightly heading into June after hitting its lowest level on record in the previous month, a survey showed on Tuesday, suggesting that Europe’s largest economy is slowly recovering from the coronavirus pandemic.

The GfK consumer sentiment indicator, based on a survey of some 2,000 Germans, remained in negative territory, but rose to -18.9 points from an upwardly revised -23.1 in the previous month.

The reading undershot a Reuters poll of analysts who had predicted a somewhat bigger rebound to -18.3.

The gradual reopening of many businesses across the country helped to lift the propensity to buy, GfK researcher Rolf Buerkl said. But he added that uncertainty remained high as consumers anticipated a severe recession.

“Anxiety over job losses remains high and has proven to be a key barrier to consumption at this time, alongside losses in income,” Buerkl said. “Retailers and manufacturers must continue to adapt to this situation.”

The improved consumer climate went hand in hand with a drop in propensity to save. Income expectations rose slightly but remained well below their level from a year ago as unemployment and reduced working hours led to income losses.

“For a number of freelancers, for example from the culture sector, there is still no end in sight for the lockdown. This means their income remains at zero,” Buerkl said.