They are the most optimistic about spending this holiday season, according to UBS’s first Christmas consumer survey.
Deutschland leaps ahead of the Christmas consumer stakes with 50 per cent of Germans polled planning to spend about the same amount this year. In comparison, in the UK, France, Italy and Spain fewer than 40 per cent of respondents plan to do the same.
Cheerful Germans? As one might expect, this struck UBS as somewhat odd.
This result looks quite surprising, as we have come to know the German consumer as a very sceptical creature, unlikely to consume when times get tough. So how can this be explained? The first possible answer is, in our view, a base effect: when compared to last year, German households are indeed unlikely to spend ‘significantly less’, simply because they already spent very little last year. The second reason is probably that up till now (that is, including the period when the survey was collected), the German labour market has held up pretty well, protecting consumers from the real consequences of recession.
And the credit crunch? German consumers also seem to have less difficulty financing their Christmas expenses – ie, they have easier access to credit. This is reflected by the question regarding access to credit such as credit cards, personal loans or overdrafts (Chart 6). Germany is the only country among the five largest EU economies where consumers think it is still rather easy to tap additional lending sources.
This confirms results from lending surveys and similar polls, which suggest that so far there is no evidence of an outright credit crunch in Germany. We believe the UBS European Christmas Survey supports our view that consumption may well decline relatively less in Germany over the next few months than in the other large EU economies. Question 36, which yields similar results for the next 12 months, even suggests that this trend could hold up in 2009.
Frohe Weihnachten to you too then.
As for the rest of the survey (2,543 European consumers polled) — the data comes out like this: Luxury goods are expected to be hit as are electronics. In general, there’s a move away from big-ticket items like TVs and computers. Food remains relatively defencive — with most respondents saying they plan to spend about the same on edibles this year. So Christmas pudding instead of an iPod. Except in Germany. Hrmph.