The Brexit Factor


A new study by GfK reports that the consumer climate in Germany weakened slightly in July as a result of the Brexit referendum in the United Kingdom.

GfK’s Consumer Climate Study found that the overall consumer climate indicator forecasts 10.0 points for August, which is down from 10.1 points in July.

Economic and income expectations suffered losses, while propensity to buy increased slightly again.

According to GfK, German consumers have evidently been affected by the Brits’ decision to leave the EU, a fact that’s signaled by the decline of both economic and income expectations. In contrast, propensity to buy was able to exceed its already very high level.

And for the first time after three successive increases, the economic expectations of German consumers have suffered a setback. The indicator lost 8.6 points in July and is now at 9.4 points, noticeably weakening the positive trend seen over the last few months.

According to the study, consumers don’t seem to believe that the German economy can continue to grow in the coming months at quite such a significant pace as in previous months.

They put this down to the Brits’ decision to leave the EU. This is also shown by the results of an additional survey carried out this month in addition to the consumer climate study.

GfK asked citizens how they thought Brexit would affect the economy and labor market in Germany. Over half of those surveyed (51%) said they believed it would have negative effects on the German economy, while around 40% dismissed such concerns.

However, those questioned indicated that they were somewhat less worried about jobs in Germany in general. Nonetheless, around 40% of consumers believe the referendum in the United Kingdom will also affect jobs in Germany.

In contrast to the consequences for the economy, optimists are in the majority when it comes to the labour market, with 52% not fearing any disadvantages for employment in general.

Beyond Brexit, the GfK study found that the economic outlook for the coming months will also be determined by how the tenser security situation/increased terror threat affects the mood of consumers.

For more on GfK’s study, go to .