No, Thanks, we're not buying
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No, thanks, we're not buying
Germany has one of the highest personal saving rates. It fell the last few years, because German population is aging, and it is well known that older people save less. Still, the German 10.2% rate is above the EU-average and it is five times higher than the savings rate in US. Good times, bad times: whatever the weather, the Germans are still setting aside a sizeable amount of their disposable income. And thus spend less.
To top it, they have not many reasons to do so. When Germans get sick or old or when they lose their job, they get money from the state - and more money at that than in most other states. Still they dislike taking on debt, they prefer to save. An average German has, by the time he is retiring, amassed enough funds to live comfortably live off them on average for ten years. As if there were no old-age pension from the state.
retail revenues
private households' savings rate
. An analysis of 2000 households last year showed, that even those, "that cant make it to the end of the month", put aside seven percent of their disposable income. A proof, that for an average German even his savings book deposits are an expense. There must be enough money for that too
For Germany their exports will have to stay its growth motor as long as this situation does not change. The German as as a subject of economy: in times of digital economy he's evidently still the "treasure hoarder" - as Carl Marx named historic precursors of a capitalist. He'll try to raise the value of his money by taking it out of the circulation.
After 09/11, George W. Bush called on the nation to go and consume. In Washington the underground was free to get people downtown. To go shopping and help the economy - what they prompty did (see interview below). In Germany, on the other side, one likes to cite the finance minister Hans Eichel: "You know, that I'm not a big shopper".
avg growth 95- 01
Of course it is quite possible to spend too much. The Americans are now so much in debt, that international investors are withdrawing their capital and that the dollar exchange rate is falling sharply. In any case, there's much space between the shopping craze of Americans and the love of Germans for their mattresses. Would the savings rate in Germany fall by three, four percent - then the consume expenses would rise, the jobless rate would fall and German enterprises would still find cheap credits on the world markets.
"Somehow every land has the growth rate, that its people want" says Ullrich Heilemann, vice-president of the RWIW in Essen."It's quite possible, Germans are quite confortable with their level of consumption".
Gerhard Schröder on his pre-election trekk will just need to find the right words to make voters understand it.
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"Germans are pessimists"
Consumer researcher Klaus Wübbenhorst over the missing readiness to buy
Z: Mr Wübbenhorst, the consumer expenses have been dropping now for months. Are Germans too poor?
KW: An average German has enough money for sure, just look at the savings rate. But consume begins with the head, not with the pockets. The consumers' feeling at the moment is very much depressed, as our research is showing. The readiness of private households to buy big-ticket items has seldom been as low as it is now.
Z: Are there any retailers, that do fine in these times?
KW: Yes,the discounters. Like Aldi and Lidl. Our research has shown, that they increased their percentage in retail revenues to 12 percent since the beginning of the year. The discounters succeeded to position themselves as providers of cheap quality. Germans have an open ear for this message. For instance, when they buy food, they do not hold much for a friendly service. Much more important to them is, that the price is OK.
Z: Looks like a character trait. The savings rate in Germany has been among the highest now for years.
W: This mirrors the typically German feel for security. Germans like to put money aside. The Americans on the other side will rather say: I live on credit, making debt is ok. The Germans are much to cautious in this regard.
Z: To consume or to save - a question of mentality?
W: Absolutely. In United States people have a very positive attitude towards a lot of things. An average American is more of an optimist, an average German on the other side more of a pessimist. Look at the example of 09.11 attacks. Afterwards George W. Bush asked Americans:"Go shopping, help the economy!" And people did it, full of enthusiasm. If such a catastrophy happened to Germany, one would probably hear:"Now we need to tighten our belts."
Klaus Wübbenhorst is the president of the GfK research institute |
