New lockdowns crush French, German consumer confidence in November

French and German consumer confidence plunged in November as new coronavirus restrictions crushed any prospect of a quick return to normal in the euro zone’s two biggest economies, data published on Thursday showed.

Restaurants, bars, hotels and entertainment venues have had to shutter up this month in both countries under new restrictions to contain a new wave of Covid-19 infections.

While retail shops have remained open in Germany, non-essential stores had to close in France. They will be able to reopen on Saturday under strict sanitary protocols.

The latest restrictions leave household demand pent-up heading into the holiday season, pushing back prospects for a consumer-led economic recovery into next year.

In France, which was put back under one the strictest lockdowns in Europe on Oct. 30, consumer confidence fell this month to its lowest level since December 2018, surpassing levels reached in March and April during a first and even harsher lockdown.

France’s official stats agency, INSEE, said its consumer confidence index fell four points to 90, worse than the average expectation in a Reuters poll of economists for 92.

Confidence was the lowest since the outbreak of violent street protests against the government during the “yellow vest” movement, which forced many shops to board up in central Paris.

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Households felt more uncertain about their financial prospects, as concern about future unemployment reached its highest level since mid-2013.

Intentions to make major purchases fell while the number of people who said it was a good time to save kept climbing and sits well above its long-term average, the data showed.

In Germany, consumer morale fell further heading into December as a partial lockdown hit households’ income expectations and their willingness to buy, a survey showed.

The GfK institute said its consumer sentiment index, based on a survey of around 2,000 Germans, dropped to -6.7 in November from a revised -3.2 in the previous month. The reading missed a Reuters forecast for a narrower drop to -5.0.

GfK consumer expert Rolf Buerkl said although retail shops remained open so far, the shutdown of restaurants, bars, hotels and entertainment venues since Nov. 2 clouded consumers’ mood. Rising cases of Covid-19 are increasing uncertainty, so Germans are holding onto their money, Buerkl added.

“The hopes for a rapid recovery that arose in early summer have definitely been dashed,” Buerkl said.

German Chancellor Angela Merkel agreed with leaders of Germany’s 16 federal states late on Wednesday to extend and tighten the coronavirus lockdown until Dec. 20, but ease rules over the Christmas holidays to let families and friends celebrate together.

On Tuesday, President Emmanuel Macron said France would start gradually easing its lockdown this weekend, though many restrictions will remain.

But some epidemiologists say France may not return to a normal way of life until next autumn, provided that vaccine programmes work.