German Confidence for June Shows Continuing Small Uptick

Germany has some degree of improvement and revival underway that has lasted for three months running on its headline GfK index. The degree of improvement monthly has been small, and the pace of improvement is slow. Economic expectations have improved for four months running, marking more improvement than for the GfK headline (GfK components lag the headline by one month). Income expectations have improved for three months running, marking some steady moderate-sized improvements. The propensity to buy has also logged a couple of monthly improvements but its recent observation for May shows a step back to -6.4 from -4.9 in April, ending its short winning streak.

Percentile standings The levels of these monthly variables show a weak headline with a standing in its 12.9 percentile historically, on data back to 2002. The component rankings fare better, with the economic expectations response above its historic median at a standing in its 65.1 percentile. Income expectations are rising and closing in on their own median (median of ranked data occurs at a ranking of 50%) with a standing in its 46.8 percentile. However, the propensity to buy index continues to lag with a standing at the one-third of queue mark, at its 33.1 percentile.

Other countries The table also presents data for consumer confidence for Italy, France, and the United Kingdom; the former two are fellow members of the Economic Union, and members of the EMU (U.K. is a former EU member). These reading lag, more like the components of the GfK survey. For Italy, the lag is larger, at two months. Italian confidence shows ongoing erosion with the current reading at a rank standing of 59.8 percent, above its historic median on the same timeline as for GfK in Germany. The French confidence reading shows signs of recent slippage and presents a monthly value with a standing at its 37.9 percentile. Italy, France, and the U.K. all reached recent local lows around August 2022 and have since mounted more or less synchronous rebounds. During this period, the Italian rebound was stronger. But the rebounding has largely ended and now the consumer indexes in Italy, Frane, and the U.K. are rolling over giving into weakness. And this is at a time that the Germany survey generally is strengthening – albeit mildly.