Between fear and hope

September 2009

If there were a chart for the most-used words, the term “crisis” would certainly be a contender for the top spot. For more than twelve months, the crisis has dominated politicians’ speeches, debates by economic experts and the evening news. How do consumers at home feel about all this? Has their outlook been affected by the crisis? A glance at consumer sentiment in recent months shows more optimism than might have been expected.

The collapse of US bank Lehman Brothers in autumn 2008 impacted on the entire financial industry. This event triggered a crisis, which along with its consequences has since dominated the global stage. Back in autumn 2008, a family in Hesse sitting down one evening realized that there was hardly any good news at all. This was confirmed by their tally sheet, which accurately recorded every negative news item that flickers across the TV screen. On that particular evening, the family discussed how the constant trickle of terrible news might affect the mood of the nation. The family concluded that it was counterproductive and an antipole needed to be found. As a result, the idea for the ( website was born. Less than a year later the website was launched, encouraging people to share with others why it is worth remaining optimistic about the future – even in times of crisis.

One year after the collapse of Lehman Brothers hope is returning

The fans of are not the only ones drawing hope from developments and spreading hope. The number of those who believe that the crisis is coming to an end is increasing across Germany. In spring this year, only 6% of Germans believed that the worst was over. However, just two months on, the number had already doubled. Currently, 15% of people think that things are looking up again. The number of those who at least believe that the economic downturn has been halted rose from 30% to 36% in the same period. Conversely, today significantly fewer than before believe that the worst is yet to come. Several surveys of GfK-Nürnberg e.V. (the GfK Association) attest to this.

Despite new hope emerging, just over a quarter of Germans remain skeptical and are fearful of the future. Is there really light at the end of the tunnel or – as Gregor Gysi once said – just an oncoming train? The response to this question partly depends on the consumers country of origin. In the West, 26% still fear that the worst is yet to come. At 37%, this figure is considerably higher in the East. What is remarkable is that four months ago, people in the East and West agreed on this matter, with a good 40% expressing a pessimistic view at the time.

The gap between East and West is widening

Hope of an upturn is spreading faster again in the West, no doubt also due to the generally better situation in the labor market. Today, 16% believe that the worst is over, which represents an increase of 9% compared with a few months ago. Although optimism is also taking hold in the East, this is happening at a far slower rate.

In addition to country of residence, the age of respondents also matters when it comes to their assessment of how long the crisis will last. The younger people are, the more likely they are to believe that the worst is over. In the summer, the number of optimists among the under 25s amounted to 17%. Now this figure is 18% and remains consistently above-average. However, the findings also highlight that young people generally find it more difficult to assess the current situation. Almost a third was unable or unwilling to reply to the question about what phase of the crisis we are in. Perhaps this is caused by the fact that reports are confusing and appear contradictory at times. Bankruptcies on the one hand and on the other, cheerful news from parts of the automobile industry, some economic institutes and stock exchanges. It is not exactly easy to judge the situation. Consequently, 22% of young respondents remained skeptical and did not think that the low point had already been reached.

Crisis-driven prospects: job security and financial leeway are decisive

The future outlook also depends very much on the individual’s circumstances. Those concerned about the main breadwinner possibly losing their job, which is currently around one in ten, have a less relaxed view of the future. At 46%, the share of pessimists in this group is clearly above average. Only just under 10% trust positive reports and believe that the recession has already bottomed out. Although this figure has slightly improved since spring, the improvement has been far less marked than that among those who consider the main breadwinner’s job to be relatively secure. The share of optimists in this group has more than doubled since spring, from 7% to 17%, and only one out of four is worried at present about the economy declining further.

It is also evident that the better people’s financial situation, the more optimistic their response is and the more rapidly have they regained hope. In spring this year, 38% of the more affluent respondents believed that the worst was yet to come. Today, this figure stands at 22%, so has almost halved. By comparison, the figure in the group of respondents with low incomes fell at a slower rate, from 48% to 39%. Those in a financially stronger position are more likely to be optimistic. Only 10% of respondents whose financial circumstances were difficult thought that the worst was over, whereas in the more affluent group, over twice as many respondents believed this to be true.

This means that the more affluent agree with economic institutes, which provided positive headlines in recent weeks. In August, the ifo business climate index climbed to its highest level in 12 years and other indices are also following an upward trend. On the back of short-time working, unemployment has increased at a slower pace than previously feared. The crisis optimists, whose movement started in Hesse, will be pleased about this. Despite the fact that it is as yet not foreseeable when the trend reversal will actually occur, they refuse to capitulate in the face of bad news. As one young woman blogged on, you don’t need courage to be skeptical, but believing in yourself requires a lot of courage.

Data source: the GfK Association (Omnibus surveys: May/June 2009, July/August 2009 and August/September 2009).

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