The consumer climate for August was depressed further by the very subdued economic outlook. Even significantly lower crude oil prices did nothing to brighten the consumer mood. As a result, the indicator reflecting propensity to buy has continued to decline. Solely income expectations recovered after the sharp downturn in July.

Following a reduction of 15.5 points in the prior month, economic expectations have ceded an additional 13.8 points to now stand at -20 points.

Consumers are not interpreting the marked decrease in crude oil prices as an all clear signal when it comes to purchasing power. The indicator for income expectations amounted to -16.8 points in August. Compared with July, this represents a slight recovery of 3.2 points. However, the long-term comparison highlights that the indicator level has remained below average.

The propensity to buy has continued on its downward tailspin. The indicator lost 1.7 points in August to stand at the current level of -27.9 points.

Inflation is broad-based at present. High energy prices are reducing the purchasing power of consumers. With manufacturing and wholesale prices rocketing most recently, there is little hope of an easing in the price trend of other fast moving consumer goods. Based on inflation, real disposable income for consumption will therefore hardly see an increase this year, despite marked nominal rises in income. Consequently, consumers are showing little inclination towards making major purchases at the moment.

The overall consumer climate indicator is forecasting a value of 1.5 points for September after the revised 1.9 for August.