The consumer climate in Germany is deteriorating ahead of the Christmas shopping season

Economists have recently increased their forecasts for German economic growth. But the improved economic situation has apparently not yet reached consumers. According to a survey, the mood among German consumers has deteriorated a few weeks before the start of the Christmas shopping season.

The barometer for the consumer climate fell by 1.19 points to 93.51 points in October, as the German Trade Association (HDE) announced in its survey of 1,600 consumers. It is therefore significantly below the level of the same month last year.

“There is currently no sign of an upturn in private consumption – despite the improvement in overall economic development,” is the conclusion of the HDE. “This also clouds expectations for the Christmas business somewhat.” At the end of the year, many stores make a large portion of their sales.

Consumers expect less income

The outlook is clouding over, especially because many consumers tend to postpone larger purchases. The current value is significantly below the previous year's value. Income expectations have also deteriorated noticeably. “At least the view of the propensity to save is positive,” it was said. The respondents therefore plan not to increase their willingness to save any further in the coming weeks.

Economic expectations have also declined compared to the previous month - even though leading economic research institutes have more than doubled their growth forecast for the German economy this year to 1.3 percent.

However, consumers expect their disposable income to decline. “The recent rise in energy prices and the high fuel prices are putting a strain on consumers and inhibiting consumer sentiment,” emphasized the HDE. Consumers also expect a rising inflation rate.

There is not really a sense of optimism in parts of the industry either. The mood in the German automotive industry deteriorated significantly in September. The barometer for the business climate fell to minus 35.0 points, from minus 22.0 points in August, as the Munich Ifo Institute announced. Companies assessed their business situation as worse than ever this year.

One reason for the weakness of the auto industry is the growing competition from China, for example in electric vehicles. In other industrial sectors such as the electrical and chemical industries, however, the mood has recently brightened noticeably.

Mechanical engineering lacks dynamism for a lasting upswing

However, there was also a setback for German mechanical and plant engineering. Order intake there fell in August. Orders fell by five percent in real terms compared to the previous year, as the industry association VDMA announced.

Domestic demand fell by two percent. A total of six percent fewer orders were recorded from abroad. The decline from the euro partner countries, at ten percent, was twice as high as that from the non-euro countries at five percent. VDMA chief economist Johannes Gernandt spoke of a “slight setback” after two months of growth.

For the first eight months of 2026, the key German industry recorded an increase in orders of four percent. However, this is based on a weak previous year and two months with many large orders, explained Gernandt. There is still a lack of new investment dynamics for a lasting upswing.