Germany sees biggest consumer spending growth in 24 years

March 15th is World Consumer Day and Germans are no exception when it comes to buying things. Last year consumer spending in Germany saw its sharpest increase since 1994, reported the Federal Statistics Office (Destatis) on Wednesday.

Germany sees biggest consumer spending growth in 24 years
Consumers in Cologne. Photo: DPA

In 2017, people in Germany spent around €1.64 trillion on private consumption – 3.6 percent more than in the previous year and thus the biggest increase since 1994.

This was driven by low interest rates, strong economic development and favourable prospects in the job market, according to Destatis.

The figure takes into account year-on-year increases in prices. Excluding these increases, consumer spending grew by 1.9 percent.

Germans bought things like cars and other durable goods. They also spent money on food and beverage as well as tobacco.

Growth in the purchase of shoes and clothing (5.9 percent) was particularly strong, showing a record increase in over 25 years.

Meanwhile expenses for hotels and restaurants also climbed (4.9 percent). And despite the housing shortage in many German cities, expenses toward apartments also saw an increase (2.7 percent) – although this was below-average.

SEE ALSO: ‘In Berlin’s housing market people are getting mad, getting scared’

Private consumption is seen as an important pillar in terms of upholding Germany’s economic boom for the long-term. But Germans were not spending all of their disposable income last year; statisticians estimate this figure was about €1.88 trillion.

The German mood for consumer spending has already been slightly subdued in March 2018, according to market research company GfK.

The GfK attributes this mainly to America’s protectionist trade policy and the slow formation of a new government in Berlin.

Earlier this month US President Donald Trump announced the US would slap levies on steel and aluminium imports on global trading partners, including Germany. The country’s economy minister afterward criticized him for “offending” allies and limiting free trade.

On Wednesday Chancellor Angela Merkel was narrowly elected by the Bundestag to a fourth term, ending almost six months of waiting. Now at last the formation of a new German government means that MPs can get to work with big issues, such as reforming Europe and digitalization.


Amazon workers across Germany go on strike for higher wages in build up to ‘online Xmas’

Employees of the online retailer Amazon have downed their tools at several locations across Germany in a protest against precarious wages, but the online shopping giant insists that the strike won’t impact Christmas deliveries.

Amazon workers across Germany go on strike for higher wages in build up to 'online Xmas'
Photo: DPA

In Bad Hersfeld, in the central state of Hesse, employees at an Amazon logistics centre started their strike early on Monday morning. A spokeswoman for the Verdi trade union said they expected about 500 workers at the retail company to take part. 

In Rheinberg and Werne in North Rhine-Westphalia, the strike began shortly before midnight on Sunday evening, with some 500 workers taking part and further 300 workers in the town of Werne joining in.

The union action has hit six locations across the country in total and strike action is set to last until Christmas Eve.

The trade union Verdi had called for strikes at various locations as it sought to push Amazon into recognition of the collective agreements which are commonly established established between trade unions and employer associations in Germany.

“Last week's closure of on-site retail has once again significantly increased the volume of orders placed with mail-order companies such as Amazon,” Verdi said in a statement.

“While the corporation continues to increase its billions in profits, it refuses to pay employees according to collective bargaining agreements. These are minimum conditions,” the union added.

A Verdi spokesman added that Amazon was earning “a golden profit” while workers' health suffered under the stress of delivering packages on time during the pandemic.

Additionally, the trade union said it wanted to push for better health and safety at the workplace in Amazon logistics centres. 

Amazon has always resisted joining in such agreements, claiming that it offers good wages outside of the traditional trade union structures.

Amazon said Monday that its employees already benefit from “excellent wages, excellent fringe benefits and excellent career opportunities.” 

The US-based firm also said that it made health and well-being at work a top priority. 

The company insisted that the strikes would have no impact on customer deliveries in the run up to Christmas, stating that the vast majority of employees work as normal.