The FINANCIAL -- 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 consequently 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.
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.