Consumer mood is collapsing among higher earners

According to a consumer survey, consumer sentiment among the highest-income households is falling more sharply than it has in months. That could slow the recovery in consumption.

Shopping bags: The consumer recovery in Germany could be slowed because the tendency to save is increasing among higher earners. Photo: dpa

Berlin. The consumer mood in Germany is deteriorating, especially among higher earners. This emerges from a detailed evaluation of the consumer survey by the Nuremberg Institute for Market Decisions (NIM), which was published on Friday.

Accordingly, the overall consumer climate indicator for October fell by 3.8 points to minus 30.6 points. However, among the 25 percent of households with the highest incomes, sentiment fell by 13.8 points to minus 38.0 points. In the lower income groups, however, consumer sentiment is comparatively stable.

“If higher-income households postpone major purchases and instead save more, this could noticeably slow down the recovery in consumption,” said NIM researcher Anja Bauer. The development is particularly relevant because the upper half of income accounts for around 68 percent of total consumer spending in Germany.

There has been a tendency to save since the beginning of the Iran War

In this group, the propensity to buy stagnates or decreases, while the propensity to save increases. “We’re not just seeing a short-term spike here: We’ve been observing the deterioration since the beginning of the Iran war, especially among the top 25 percent,” said Bauer.

The data shows that among the highest-income households, in addition to their propensity to buy, their expectations of their own income are also falling. In the lower income groups, however, the propensity to save is declining, while the willingness to make purchases remains largely unchanged. The evaluation is part of the monthly survey of around 2,000 consumers. The current survey took place from early to mid-September.

The German economy developed better than initially expected in the first half of the year. Accordingly, the research institutes have revised their growth forecasts upwards for this year and next. They are now estimating an increase in gross domestic product of 1.3 percent for 2026 and 1.1 percent for 2027. However, private consumption has not yet really taken off.

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