Emrullah Karaca checks hydraulic valve blocks at his work place at the Continental Automotive Technologies’ plant in Gifhorn, Germany, on April 23, 2024. Production of the car component at the town of Gifhorn will end in 2027 and move to Croatia, the Czech Republic and Wales to keep the costs “competitive”, according to Continental, which will cut about 7,000 jobs worldwide. (Photo by Léa PERNELLE / AFP)
Frankfurt, Germany — German consumers are feeling more pessimistic heading into September, a key survey showed Tuesday, as concerns about jobs and wages add to a gloomy outlook for Europe’s largest economy.
The survey of around 2,000 people showed that consumer morale “suffered a severe setback” compared to a month earlier, according to pollsters GfK and the Nuremberg Institute for Market Decisions (NIM).
The forward-looking indicator fell by 3.4 points to minus 22 points for September, they said in a statement.
READ: German business morale falls again in August
The “euphoria” triggered by the European football championship hosted by Germany in July “dissipated after the tournament ended”, said NIM consumer expert Rolf Buerkl.
“Slightly rising unemployment figures, an increase in corporate insolvencies, and downsizing plans by various companies in Germany are causing a number of employees to worry more about their jobs,” he said.
“Hopes for a stable and sustainable economic recovery must therefore be further postponed.”
The survey found that respondents were “noticeably” more downbeat about their wage prospects for the coming 12 months, and less likely than a month ago to make large purchases.
Consumers’ assessment of Germany’s economic outlook also worsened, erasing last month’s gains.
The darker mood comes after preliminary data showed that the German economy unexpectedly shrank in the second quarter, weighed down by cooling exports and an ongoing industrial slump.
Another closely watched survey, by the Ifo institute, showed on Monday that German business morale deteriorated further in August, particularly among companies in the manufacturing sector.
The German government expects the country’s economy to expand by 0.3 percent in 2024, lagging behind the wider eurozone which the European Union predicts will grow by 0.8 percent.