EU consumer confidence at highest level in over nine years

EU consumer confidence at highest level in over nine years

EU consumer confidence at highest level in over nine years

The FINANCIAL -- Consumer sentiment within the EU 28 has continued its upward trend in the third quarter of this year, finishing on 20.9 points. This is up from 19.1 points at the end of Q2 and now stands at a level not seen since the end of 2007.

Rolf Bürkl, GfK’s consumer expert, comments, "Private consumption has proved a major pillar for the EU economy during the last quarter with several countries either improving or holding steady on the ‘propensity to buy’ measure. This has combated the more mixed results seen in individual countries within the other measures, where economic expectation has dropped in France, Germany and Portugal, and income expectation has fallen in France, Austria and Germany, compared to the second quarter of 2017."

Germany: Economic and income expectations show some turbulence

Despite excellent domestic conditions for high consumer sentiment, based on low unemployment rate and positive income growth, Germany’s consumer sentiment has shown some turbulence in the last quarter.

Having climbed steadily since February, the economic expectation in Germany dropped suddenly in mid-quarter of Q3, before climbing back to finish on 33.4 points at the end of September. This is a drop of 7.9 points compared to the end of Q2, but remains 26.6 points higher than the same time last year.

Income expectation in Germany started Q3 with a small increase, but dropped sharply in September to end at 52.7 points. This is a drop of 7.5 points compared to the end of Q2, but stays nearly level with the same time last year (+0.1 point).

Propensity to buy as remained fairly steady in Q3, continuing to hold at a 1 historically high level and finishing the quarter on 57.0 points. This is very slightly down from the end of Q2 (-0.9 point), and up 3.7 points compared to the same time last year.

France: Sharp falls in economic and income expectation

After the positive “Macron effect” seen in Q1 and Q2, France has suffered falls across all three measures during Q3. This comes amidst a background of continuing high unemployment rate - which is double that of other big European economies, such as Germany - and strong media focus on Macron’s planned labor market reforms.

Economic expectation dropped throughout the quarter, ending on 30.2 points at the end of September. This is a significant drop of 18.9 points compared to the end of Q2, but remains 23.4 points higher than the same time last year.

Income expectations dropped sharply at the start of Q3, before rising slightly and then dropping again during September to end on -18.9 points, a low not seen since April 2016. This is a drop of 21.6 points compared to the end of Q2, when France’s income expectations had finally nudged back into positive territory after nearly ten years in negative territory. It is also 5 points lower than the same time last year.

After a level start, propensity to buy dropped slightly during the end of the quarter to finish on 22.7 points. This is a down 2.8 points compared to the end of Q2, but still 14 points higher than the same time last year.

Great Britain: Holding steady, with a small increase in income expectation

Despite continued uncertainty over the outcome of Brexit negotiations, Great Britain’s situation has held fairly steady in the last quarter and even shows a gentle increase in income expectation.

Economic expectation in Great Britain dropped mid-way through Q3 before rising slightly to finish on -23.5 points. This is 2.8 points down since the end of Q2 and a significant 21.7 points lower than the same time last year.

Income expectation rose comfortably in the first two months of Q3 before tailing off slightly in September. It ended on 4.3 points, which is an increase of 6.3 points since the end of Q2, but still 9.4 points lower than the same time last year.

Propensity to buy saw increases at the start and end of the quarter, balanced by a dip mid-quarter, to end on -3.5 points. This is exactly the same level as at the end of Q2, but 10.2 points down compared to the same time last year.

Italy: Q3 improvement, but economic and income expectations still in negative territory

Italy has seen signs of improvement in consumer confidence during Q3, even as the Italian economy continues to battle with high youth unemployment and the financial burden of high numbers of refugees from Northern Africa Economic expectation has shown a steady improvement over the quarter, with September in particular showing a strong improvement. The quarter ended at -27.6 points, which is its best level since May 2016. This is a notable 27.9 points better than at the end of Q2, and 13.0 points up on the same time last year.

Income expectation rose steadily in both July and August, before tailing off slightly during September, to finish on -8.2 points. This is an improvement of 9.7 points compared to the end of Q2 and 1.8 points compared to the same time last year.

Propensity to buy continued the upward turn seen last quarter to end September on 16.1 points. This is 12.4 points better than at the end of Q2 and a respectable 9.3 points higher than the same time last year.

Spain: Propensity to buy registers first positive rating in over five years

Despite continued high unemployment levels, consumer economic sentiment in Spain has remain steady and even improved in the area of propensity to buy. This is possibly due to improvements in tourism levels. However, recent political violence around the Catalonian polls may well show repercussions in Q4.

Economic expectation in Spain ended the third quarter on 24.9 points, exactly the same level as at the end of Q2, having lost the small growth in September. This is 12.4 points higher than at the same time last year.

Income expectation also held relatively steady after early growth in July, to end on 16.0 points. This is up 1.9 points since the end of Q2 and a rise of 7.3 points compared to the same time last year.

Propensity to buy saw sharp gains in July, which were again largely lost towards the end of the quarter, ending on 1.5 points. Despite the last minute down-turn, this is still the first time in over five years that Spain has recorded a positive rating for propensity to buy. Overall, Q3 has closed with an improvement of 3.2 points compared to the end of Q2, and is up 6.4 points compared to the same time last year.

Netherlands: Economic expectations leading the signs of recovery

With unemployment going down and salaries increasing, consumer confidence continues to show signs of improvement. Economic expectation rose in July and held relatively steady for the rest of the quarter, ending on 39.0 points. This is up 5.8 points compared to the end of Q2 and is a strong 21.1 points better than the same time last year.

Income expectation also rose in July, hitting a high of 13.4 points, before falling back to 10.5 points at the end of September. This is only 0.2 points higher than at the end of Q2, but a respectable 17.0 points higher than the same time last year.

After a small rise in July, propensity to buy dropped back to very much the same level as in July, finishing on 18.2 points. This is just 0.4 points lower than at the end of Q2 and 0.8 points higher than at the same time last year.

Austria: Economic expectation at highest level since Q1 2011

With Austria experiencing growth driven by consumption and investments, consumers continue to feel confident in the economic outlook for the country.

Economic expectation continued its steady increase during Q3, to stand at 32.9 points by the end of the period – the highest level since early 2011. This is 14.2 points up since the end of Q2 and a huge 40.2 points up compared to the same time last year.

After the strong overall increase seen in Q2, income expectation suffered drops in both July and August, but recovered some of this ground during September to end on 22.4 points. This is down 8.2 points compared to the end of Q2 and also down 2.0 points since the same time last year.

The steady increase in propensity to buy continued during July, but then experienced a sharp drop during August, to finish Q3 at 19.8 points. This is a drop of 3.0 points from the end of Q2 and is just 1.9 points higher than at the same time last year.

Portugal: Propensity to buy hits 15-year high

Despite an upward revision in Portugal’s forecast, the nation’s consumers have shown a slight drop over the last quarter in their confidence around the nation’s economy. However, they have maintained high propensity to buy, which is also reflected in the robust domestic demand.

Consumers in Portugal were unable to maintain the upward trend in economic expectation seen in Q2 and gradually slipped back to stand at 34.7 points at the end of September. This is 4.7 points lower than at the end of Q2, but still 19.9 points higher than at the same time last year.

Income expectation also showed a slight dip mid-quarter, but climbed back to 28.5 points by the end of Q3. This is just one point down, compared to the end of Q2 and 8.4 points higher than at the same time last year.

Propensity to buy continued the clear upward trend seen in Q2, rising to a high of 13.0 points by the end of September. This is the highest level seen since the end of 2001 and is 8.9 points up since the end of Q2 and a strong 29.6 points up compared to the same time last year.

Belgium: Economic expectation at highest level since Q1 2014

Following strong exports, Belgium has seen continued improvement in consumer economic expectation, with signs of improvement also showing in income expectation.

Economic expectation rose steadily during Q3, to stand at 24.3 points at the end of the period. This is the highest level recorded since Q1 2014. This is 10.1 points higher than the end of Q2 this year and a strong 21.8 points higher than the same time last year.

After the downward trend seen in Q2, income expectation recovered during Q3, although with a slight hiccup during August. It ended the quarter at -2.8 points, which is an improvement of 5.3 points since the end of Q2 and of 12.5 points since the same time last year.

Following the steady drop in propensity to buy seen since April’s high point, this measure finally rose in August, but fell again in September to end the quarter on 14.8 points. This is a rise of 1.3 points compared to the end of Q2 and is up just 0.6 points compared to the same time last year.

Greece: Continued strong improvement across all measures

With Greece showing continuing notable improvement across all three measures, consumers in the country are pushing towards positive territory.

Greece has continued and accelerated the improvement in its economic expectation this quarter, finishing on -18.1 points. This is the best level recorded since mid-year 2015 and stands 25.1 points higher than at the end of Q2 and 19.0 points higher than at the same time last year.

Income expectation also continued to improve throughout the quarter, standing at -21.1 points at the end of September. This is an increase of 21.8 points since the end of Q2 and 16.4 points higher than at the same time last year.

The same positive trend was also seen in propensity to buy, with steady improvement recorded in all three months of the quarter, ending on -26.2 points. This is 18.7 points up on the end of Q2 and a rise of 16.6 points compared to the same time last year.

Poland: Solid improvement across all measures in Q3

After a jumpy Q2, Poland has seen a continuous upward trend in economic expectation during the whole of Q3, possibly driven by the current high GDP growth rates in the country. September finished on 34.3 points, the highest level recorded since 2008. This is an increase of 15.4 points compared to the end of Q2 and also a rise of 10.6 points since the same time last year.

Income expectation also increased consistently during the last quarter, to stand at 36.7 points by the end of the period. This is 11.7 points higher than at the end of Q2, but a slight drop of 6.0 points compared to the same time last year.

After the sharp drop in propensity to buy seen in Q2, this measure improved notably in August before tailing off very slightly in September. The quarter finished at 19.3 points, which is rise of 12.7 points since the end of Q2 and of 7.8 points since the same time last year.

Czech Republic: Economic expectation regains lost ground during Q3

With the lowest unemployment rate within the EU, consumers in the Czech Republic continue their positive outlook on both the economy and their propensity to buy. However, income expectation has failed to improve, possibly due to ongoing Brexit negotiations and the as yet unknown effect on the Czech economy (the UK is the Czech Republic’s fourth-largest export market, and many of its citizens live in Britain).

The strong level of economic expectation seen in Q1 dropped somewhat in Q2, but has made a partial recovery during Q3. September ended on 27.6 points, which is 9.5 points better than at the end of Q2, but still 8.8 points lower than at the same time last year.

Income expectation, which has shown a downward trend during the first two quarters of the year, began to improve towards the end of Q3. Finishing at 39.9 points, it is just 0.9 points lower than at the end of Q2, but still 12.2 points down compared to the same time last year.

Propensity to buy also made some recovery from the previous quarter’s overall downward trend, finishing the period at 20.4 points. This is 5.7 points up from the end of Q2 but 6.8 points down compared to the same time last year.

Slovakia: Propensity to buy rises strongly in Q3

Despite some turbulence in consumers’ economic expectation for Slovakia, all three measures have recorded end-of-quarter increases, following stable growth and reducing levels of unemployment in the country.

After the steady decline in economic expectations recorded in the first months of the year, Slovakia has witnessed a ‘yo-yo’ effect since May, with economic expectations jumping one month and falling the next. This has continued during Q3, with September ending on a high of 22.8 points. This is 5.5 points higher than at the end of Q2, but 5.8 points lower than at the same time last year.

Income expectation, which had ended Q2 at its lowest point that year, rose in September to finish on 28.2 points. This is an increase of 2.8 points since the end of Q2 and only a small fall of 1.8 points compared to the same time last year.

Propensity to buy also saw notable recovery during September. After finishing Q2 at a low level not seen since the beginning of 2016, propensity to buy rose strongly in September to stand at 15.9 at the end of Q3. This is 11.3 points higher than at the end of Q2 and 2.3 points higher than at the same time last year.

Slovenia: Income expectation and propensity to buy drop slightly in Q3

After the steady increase in economic expectation seen during Q2, the first two months of Q3 recorded falls, before jumping again in September to finish on 28.3 points. This is an increase of 4.3 points since the end of Q2 and an even stronger increase of 22.2 points since the same time last year.

Income expectation, which has been fairly steady during the first half of the year, fell slightly during Q3, to stand at 20.0 points at the end of September. This is a drop of 4.8 points compared to the end of Q2, but is still 2.1 points higher than at the same time last year.

Following a steady increase during the first half of the year, propensity to buy dropped suddenly in July. While it improved slightly during August and held steady in September, it ends the quarter on 18.9 points. This is an overall fall of 5.9 points since the end of Q2, but remains 10.1 points better than at the same time last year.

Bulgaria: All three measures improve as economic expectation reenters positive ground

Early turbulence following the March elections in Bulgaria has largely settled, with all three measures recording overall improvement, compared to the end of Q2.

Economic expectation has recovered from the negative territory seen in Q2, hitting a high of 4.1 points in August, before settling back to finish Q3 on 1.4 points. This is an improvement of 9.2 points compared to the end of Q2 and is also 2.2 points higher than at the same time last year.

Income expectation, which had also plummeted in the first half of Q2 and only made a partial recovery in June, continued to climb in July. It dropped sharply again in August, but recovered nearly all the lost ground during September to end Q3 on 15.3 points. This is a rise of 3.8 points compared to the end of Q2 and also up 2.8 points compared to the same time last year.

Propensity to buy as improved steadily during Q3 to stand at 23.6 points – its highest point since January this year. This is 7.2 points higher than at the end of Q2 and 2.5 points higher than at the same time last year.

Romania: Little movement in economic or income expectations, but propensity to buy climbed)

Despite the country’s high income growth, low inflation and VAT cut, consumers in Romania have shown little overall movement in their economic outlooks during Q3.

After a relatively steady Q2, economic expectation has jumped around during Q3, to return to nearly the same level as at the end of the previous quarter. September closed on 6.3 points, which is 0.9 points lower than at the end of Q2, but 5.1 points higher than at the same time last year.

Income expectation also suffered a small drop at the start of Q3, but then held steady to end the quarter on 24.2 points. This is down 2.1 points since the end of Q2, but still an improvement of 3.4 points compared to the same time last year.

Propensity to buy has shown the greatest movement. It started the quarter by holding steady at the Q2 level, before climbing in September to 12.0 points. This is a rise of 6.4 points from the end of Q2 and also an increase of 9.7 points compared to the same time last year.