Consumption study: Increasing propensity to consume in all income groups

Consumption study: Increasing propensity to consume in all income groups

According to a current study by the Institute for Macroeconomics and Economic Research (IMK) of the Hans Böckler Foundation, the propensity to consume among consumers of all income groups is increasing noticeably. Researchers expect an increase in consumption, particularly in the areas of leisure, entertainment, culture and housing maintenance. The study authors, Jan Behringer and Sebastian Dullien, see signs of an impending “consumption shift”. This could occur if the inflation rate continues to fall over the course of the year and real wages rise again after years of decline.

The expected increase in private consumption could stimulate the economy in the coming months. The improved sentiment among consumers is mainly attributed to the decline in energy prices and the inflation rate. Researchers also expect consumer spending to increase in areas such as travel, tourism, interior design, household appliances, clothing and shoes. On the other hand, the increase in food, beverages, tobacco products and restaurant visits is smaller, partly due to the increased VAT on food in restaurants at the beginning of the year.

However, the study shows that low-income households continue to be under pressure. The price increases of the past few years and the associated real wage losses will continue to have a negative impact for some time. In these households, most consumers continue to plan for savings, particularly on clothing, home furnishings, leisure activities and vacations. Despite the generally more positive consumer climate, financial challenges for low-income households remain.