By Maria Martinez
BERLIN (Reuters) – A business climate index for Germany's retail sector fell slightly on average consumer spending in December, as retailers assessed their current situation as worse than in November, the Ifo Institute said on Friday.
Business expectations for the coming months have also fallen slightly, Ifo added.
This year was very difficult for the retail sector and the overall economic situation will remain difficult in 2025, “although many retailers hope to improve consumer sentiment,” said Ifo expert Patrick Hoeppner.
Although the business situation in the consumer goods industry initially improved in the first half of 2024, things declined in the second half of the year, Ifo research showed.
In addition to weak demand, a shortage of skilled labor remains a major problem for many retailers in 2024, Hoeppner said.
The outlook for 2025 is mixed. The increase in disposable income may provide good momentum, but the uncertainty of economic policy continues to be difficult for both sellers and consumers, Ifo added.