The method of the GfK Consumer Climate powered by NIM

The results are extracted from the “GfK Consumer Climate powered by NIM” study and are based on around 2,000 consumer interviews per month co-funded by the EU Commission. As of October 2023, the consumer climate data collected by GfK has been analyzed and published jointly with the Nuremberg Institute for Market Decisions e. V. (NIM), founder of GfK.

Survey design

• Representative population survey
• Sample: Approx. 2,000 representative for the German population
• Methodology: Since May 2019: online interviews (GfK-eBus); until April 2019: face-to-face interviews (CAPI-Bus)
• Survey frequency: Monthly
• Fieldwork: Approx. 2 weeks

Sentiment indicators

For the study 5 sentiment indicators are surveyed.
Of these, the following 3 indicators are included in the calculation of the consumer climate indicator:

• Income expectation: Shows how consumers expects the development of their household's financial situation over the next 12 months.
• Willingness to save: Reflects consumers' views on whether it is currently advisable to save, in view of the general economic situation.
• Willingness to buy: Determines the extent to which consumers currently consider wether it is the right moment for people to make major purchases such as furniture, electrical/electronic devices, etc.

The other two indicators reflect consumers' opinion regarding the development of the general economic situation and consumer prices in the coming 12 months:

• Economic expectation: Determines consumers' opinion of how the general economic situation in Germany will develop over the next 12 months.
• Price expectation: Asks how consumers believe consumer prices will develop in the next 12 months compared with the last 12 months.

How are the indicators calculated?

• Basis for the indicators are balances of the positive and negative answers. Furthermore these “raw” balances are computed with certain statistical procedures like seasonal adjustment as well as smoothing.
• In a further step, balances are standardized using well-known statistical methods and then converted in order to get a long-term average of the indicator of about 0 points and a theoretical value range of +100 to -100 points. However, empirical evidence shows, that values between +60 and -60 points have generally been realistic.
• If an indicator is positive, this shows that consumers’ assessment of this variable is above average in a long-term comparison, and vice versa for negative values.
• Standardization ensures better comparability of indicators, especially in international comparisons..
• Climate symbols visualize the sentiment for a better understanding too.

How is the consumer climate calculated?

• The consumer climate indicator is the result of a regression analysis. Growth rate of private consumption in real terms is the dependent variable.
• Three consumer sentiment indicators are selected as independent variables and are the bases of consumer climate:
• Income expectation
• Propensity to buy
• Propensity to save (with negative sign)

How to read the consumer climate?

• The consumer climate gives an insight into the level and general trends of private consumption. The indicator has to be divided by 10.
• Example: An indicator point of 5 signals the increase of the private consumption in real terms of 0.5% in comparison to the previous year.
• The saving climate is calculated in a similar way.
  The saving ratio is the dependent variable. An indicator point of 100 corresponds to a saving ratio of 10.0%.