The study "GfK Purchasing Power Germany 2012" by GfK GeoMarketing indicates that Germans will have around €400 more per capita in nominal disposable income for expenditures in 2012 than in the previous year. However, this growth is anticipated to be almost completely counterbalanced by rising prices. Germans' consumer potential varies widely from region to region. The study reveals that the city state of Hamburg ousts Bavaria as the nation's federal state with the highest purchasing power.
GfK GeoMarketing predicts a purchasing power of €1,636.2 bil. for all of Germany in 2012. Each citizen will accordingly have an average of €20,014 at his or her disposal in 2012 for consumption, rent and other living expenses.
Purchasing power corresponds to the population's disposable net income, including government subsidies such as pension payments, unemployment assistance and child benefit. Germany's number of employed is predicted to moderately increase again in 2012 and income trends in many branches are anticipated to remain favorable. Monetary government benefits are also expected to climb somewhat - e.g., pension payouts are predicted to increase more in mid-2012 than in the current year. Based on this favorable outlook, GfK GeoMarketing predicts a two-percent increase in purchasing power in 2012. This equates to €413 per capita and a nationwide increase of €32.8 bil. compared to 2011. The predicted purchasing power figures are, however, nominal values that are not adjusted for inflation.
"Germans' real-value purchasing power is predicted to approach stagnation in 2012," explains Simone Baecker-Neuchl, head of GfK GeoMarketing's market data & research division and project leader of the purchasing power study. "The German Federal Bank currently projects an inflation of around 1.8 percent for 2012. This almost completely offsets the nominal purchasing power growth of 2 percent. Economic growth opportunities, particularly for the retail sector, thus continue to be directly contingent upon the mood and confidence of consumers."
Germany's federal states: Hamburg overtakes Bavaria
The three city states of Bremen, Hamburg and Berlin are this year's winners among Germany's federal states, as index values for these federal states changed most compared to last year's values. Inhabitants of Bremen and Hamburg will have a per capita average of €18,684 and €21,985 respectively at their disposal in the coming year. For the first time since 2007, Bavaria no longer occupies the top spot among Germany's federal states, with this position now occupied by Hamburg.
There are no other changes in the ranking of Germany's federal states. The federal states in eastern Germany continue to occupy the lower spots. Last-ranked Saxony-Anhalt has a per capita purchasing power of €16,606, which is more than €5,300 less than the corresponding figure for top-ranked Hamburg.
District ranking remains largely unchanged
A similar portrait emerges at the level of Germany's 412 urban and rural districts. There have been no major changes in the ranking of the 25 districts with the most purchasing power, with the sole exception of the rural district of Miesbach in Bavaria, which climbed nine spots. The list of the top-ten districts is identical to that of the previous year. The two top positions are held by Hochtaunuskreis district in Hesse and Starnberg rural district in Bavaria, with a per capita purchasing power of €29,285 and €29,142, respectively. Next in the ranking are the following districts, all of which have a similar level of purchasing power: Munich rural district, Main-Taunus-Kreis rural district, Munich urban district and Ebersberg rural district. Inhabitants of these districts have an average per capita purchasing power ranging from €27,877 to €26,704, which is 33 to 39 percent more purchasing power than the national average.
Half of the 25 districts with the highest purchasing power in Germany are located in Bavaria. The districts in eastern Germany with the highest purchasing power are all located in the federal state of Brandenburg. The rural district of Potsdam-Mittelmark ranks 165 (€19,898 per capita); the urban district of Potsdam ranks 187 (€19,575 per capita) and the rural district of Oberhavel ranks 241 (€18,941 per capita).
Gauging purchasing power among urban districts
With the exception of Munich and Erlangen, the ten districts with the most purchasing power are all rural districts. This can be explained in part by the fact that the average purchasing power in Germany's large cities is brought down by the high share of young people - such as students - with lower incomes; by contrast, segments of the population with higher income often settle in the residential areas outside of the cities. An analysis focusing exclusively on the 111 urban districts among Germany's total 412 districts yields the following results: The five cities with the most purchasing power are Munich (index: 137.2), Erlangen (index: 125), Düsseldorf (index: 120.9), Baden-Baden (index: 119) and Frankfurt am Main (index: 117.5). These cities have a per capita purchasing power ranging from €27,464 to €23,510. Bringing up the lower end of the ranking is the city of Bremerhaven, with a per capita purchasing power of €16,439 (index: 82.1), followed by Wismar (index: 82.7), Halle (Saale) (index: 83.6), Brandenburg an der Havel (index: 83.9) and Stralsund (index: 84.2).
Purchasing power trends
A comparison of the forecasted index values to those of the previous year reveals that six of the ten districts with the largest positive changes are located in Bavaria, led by Starnberg, Garmisch-Patenkirchen and Miesbach.
GfK defines purchasing power as the sum of all the population’s net income with reference to their place of residence. In the calculation of purchasing power, net income from self-employment and employment are included as well as capital income and national benefits such as unemployment benefit, child benefit and pensions. However, living costs, insurance, rent and additional expenses such as gas and electricity, clothing and savings are not deducted from these disposable income figures.
Calculations are based on statistics for wages, income taxes and national benefits as well as on economic institute forecasts. GfK has been calculating purchasing power since 1937. GfK GeoMarketing annually publishes the complete forecast for the new year on January 1. As of this date, the GfK purchasing power data is available for all German urban and rural districts, for all counties and postcode areas and for 2.5 million street sections.