Germans’ purchasing power climbs 2.8 percent in 2018

Bruchsal, Germany, December 12, 2017 – Germans’ 2018 purchasing power will rise to €22,992 per person according to the GfK study released today. This amounts to a nominal per-person increase of 2.8 percent, or €633.

GfK forecasts a total purchasing power of €1,893.8 bil. for Germany in 2018. This is a nominal per-capita increase of 2.8 percent or €633 over the revised forecasted values from last year. In 2018, Germans will conse-quently have an average per-capita purchasing power of €22,992 available for consumer purchases, accommodation, recreation and saving.

Purchasing power is a measure of the population's disposable net income, including government subsidies such as pension payments, unemployment assistance and child benefit. The 2018 purchasing power increase is based on growing salaries in many industries as well as a stable employment market. A rise in pensions is also anticipated for 2018. But the real-value amount that remains from this nominal purchasing power increase depends on how consumer prices develop in the coming year.

Regional purchasing power distribution

There are few changes to the 2018 distribution of purchasing power at the level of Germany’s federal states. An exception is Berlin’s overtaking of Bremen to assume tenth place. The other eastern federal states are also developing positively, with purchasing power index increases between 0.7 and 1.1 percent compared to the previous year. Even so, they are still sig-nificantly below the level of the western federal states.

North Rhine-Westphalia, Schleswig-Holstein and Bremen have the largest decreases, with index losses between 0.7 and 0.8 percent. But this is only a relative decline, because the index represents deviations from the na-tional average. Nominal per-capita purchasing power will rise next year in all of Germany’s federal states.

Purchasing power in Germany’s districts

As in previous years, Germany’s highest purchasing power average can be found in the Bavarian rural district of Starnberg: With €33,102 per person, inhabitants of this district have around 44 percent more purchasing power than the national average. There are three changes to the rankings of Germany’s top ten urban and rural districts. Erlangen falls one spot to ninth place, switching positions with Dachau, while the rural district of Miesbach moves into the top ten, up from twelfth place. Miesbach ousts the district of Stormarn, which drops from tenth to seventeenth place.

With €18,157 per person, the rural district of Görlitz once again brings up the rear among Germany’s districts. Inhabitants of this district have around 21 percent less than the national average, which, in 2018, is represented by the rural district of Günzburg.  

Germany’s most populous urban districts

The nation’s 25 most populous urban districts alone comprise a fifth of Germany’s total purchasing power. But not all the country’s large cities have above-average purchasing power: When it comes to per-capita purchasing power, the capital city of Berlin lies eight percent below the national average, with Dortmund and Dresden coming in at a similar level. Even further behind is the city of Leipzig, which has 12 percent less than the national average.

Urban districts with more than 500,000 inhabitants


Purchasing power density
an important indicator of retail potential
The purchasing power totals demonstrate that Germany’s most populous cities and particularly the large metropolitan regions are indispensable target markets for retailers and service providers. Purchasing power density—the available purchasing power in millions of euros per square kilometer—is very high in metropolises such as Berlin, Hamburg and Munich, but also in the Ruhr region, the greater metropolitan area of Stuttgart and Frankfurt/Main. A high purchasing power density indicates that companies can tap significant purchasing power potential within a small geographic area even just among their residential target group. 

About the study

GfK Purchasing Power is defined as the sum of the net income of the population according to place of residence. These purchasing power figures take into account income related to self- and non-self employment as well as capital gains and government subsidies, such as unemployment assistance, child benefit and pension contributions. Not included in these calculations are expenditures related to living expenses, insurance, rent and associated costs such as utilities (gas and/or electricity), clothing and savings plans.

As a result, a nominal increase in purchasing power does not mean that each individual has more money in real terms at his or her disposal if rising costs for the above-mentioned expenditures exceed the purchasing power increase. Also important to note is the fact that the purchasing power of a given region reflects an average value among the inhabitants living there rather than the purchasing power of specific individuals, households or the associated income distribution and gap between “rich” and “poor”.

Calculations are carried out on the basis of reported income and earnings, statistics relating to state benefits as well as forecasts provided by economic institutes. GfK releases the purchasing power prognosis for the new year in January. As of that time, GfK purchasing power data is available for all of Germany's urban and rural districts, municipalities and postcodes. The purchasing power data for street segments is updated in the second half of the year.

Applications

Regional GfK purchasing power data serves as an important basis of planning for sales and marketing endeavors among companies from a diverse range of industries. These applications require an accurate illustration of the regional distribution of purchasing power.The focus of the study is consequently not on tracking data trends over the years, but rather on providing a prognosis that reflects this regional distribution. It is therefore not advisable to compare current figures with data from previous years.

Additional information on GfK's regional market data can be found here.

Print-quality illustrations can be found here.  

About GfK

GfK connects data and science. Innovative research solutions provide answers for key business questions around consumers, markets, brands and media – now and in the future. As a research and analytics partner, GfK promises its clients all over the world “Growth from Knowledge”. For more information, please visit  www.gfk.com   



Contact:

Cornelia Lichtner
Public Relations
+49 7251 9295 270
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  • The true efforts of policy makers March 31, 2020
    Reviewed by 'Anna Sporer'
    It shows the real progress and development of Germany and good policies by the policy makers that resulted in the increase of purchasing power of people. As a student of business study, I am going to mention these statistics in my assignment. I've completed the introduction with the help of au-assignmenthelp.com source and detailed report with your statistics, I am sure this will make my assignment excellent.

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