GfK has revealed the findings of its latest consumer climate study.
Overall, consumer confidence in Europe experienced very positive growth in the fourth quarter of 2016. The GfK consumer climate for the 28 EU countries rose by 5.6 points to 17.9 points in December, its highest value since January 2008.
The topics dominating headlines in Europe during the fourth quarter of 2016 were the war in Syria, terrorism in Europe, the US presidential election at the end of November, and the continued rise of nationalist parties and tendencies in virtually all European countries. It is clearly evident, however, that all this negative news has not rubbed off on consumers. It appears that Europeans are being increasingly selective as to precisely which topics they allow to have an influence on their daily lives.
Economic and income expectations barely recover in Great Britain
After temporarily dropping to their lowest level in four years (-28.2 points) in July following the Brexit vote, the economic expectations of British consumers initially stabilised at the end of the third quarter.
However, the indicator fell again by 9.8 points between September and December, ending the year at -11.6 points. This is 28.2 points lower than at the same time in the previous year.
It appears as if British consumers expect their country’s economy to decline in the coming months due to the vote in favour of Brexit, GfK notes. So far, however, Britain’s promised departure from the EU has not had any perceptible impact on its economic strength, with its gross domestic product growing by 2.2% in the third quarter of 2016 compared with the same time in the previous year.
At the other end of the spectrum, income expectations rose by 13.2 points in the fourth quarter of 2016, reaching 3.2 points at the end of the year. This nevertheless represents a drop of 3.4 points compared with the figure recorded at the end of 2015, GfK adds. However, it is a reverse of the negative trend seen over the summer in the immediate aftermath of the Brexit vote. This indicator has also been positively influenced by the low unemployment rate, which currently stands at 4.8% – the lowest value since the third quarter of 2005.
Despite the negative economic developments, the propensity to buy of the British increased by 8.8 points to 15.5 points in the fourth quarter of the year. This means that the overall trend remains positive, as in December the indicator stood at around five points higher than at the same time in 2015.
