Turning their attention to Europe, the local population consumption is clearly less optimistic than in the United States. Recently, European sales for HiBREW, a manufacturer of coffee machines based in Guangdong, China, were declining. Before that, suppressed global demand last year had pushed up purchases of consumer goods in China, bringing a wave of strong export growth. So far this year, sales are down 30 to 40 percent, in contrast to last year's 70 percent increase, said Zeng Qiuping, the company's director.


A leaf knows autumn, and the European economy is suffering from the Russian-Ukrainian conflict and soaring energy prices and high inflation, with popular consumer demand suppressed by the sluggish economic outlook and high prices. Many European consumers are beginning to spend cautiously, and the purchase of new cars is often the first purchase item to be postponed.

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The European Automobile Manufacturers Association (ACEA) recently released data show that in June this year, Europe's new car sales suffered a "12 consecutive decline", down 17% year-on-year to 1.07 million units, due to continued disruptions in the supply chain and the impact of inflation, June hit the lowest level of new car sales in Europe since 1996. Sales in Germany, Italy, France and Spain, the four major EU auto markets tracked by the association, all saw declines. In Germany alone, sales fell by 18.1 percent. This decline is largely in line with the sharp drop in new car purchases in Europe so far this year. According to ACEA, new car registrations in the EU fell by nearly 14 percent in the first half of 2022.


Further, the continued depreciation of the euro has also raised imported inflation and imported goods prices in Europe. So far this year, the euro has depreciated by nearly 11% against the U.S. dollar, and on July 12, the euro finally fell to the "one" psychological barrier against the U.S. dollar, while the U.S. dollar index broke 108, a new high in 2002. When a country's currency depreciates, it means that the cost of imports climbs, the current situation, many exports to the European market of China's foreign trade feedback that orders have become less, the frequency of buyers slowing down orders.


The German consumer confidence index hit a record low of -26.2 in June, and in July the German consumer confidence index was -27.4 points, down 1.2 points from the previous year, the lowest since 1991. Currently, the three indicators reflecting German consumer confidence - economic outlook, income expectations and propensity to buy - are all down from a year ago, with income expectations down 9.8 points from a year ago, the lowest value since December 2002. A recent survey of 800 companies by the German Trade Association showed that 45% of retailers expect a year-over-year decline in business conditions in the second half of the year, and only 20% expect sales to increase in the second half of the year. Germany is not alone in this situation across Europe. According to Eurozone data for June, the consumer confidence index for the Eurozone was -23.6.

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What's worse, 43% of Europe's natural gas supply comes from Russia, which is currently under pressure from the Russia-Ukraine conflict, and Europe's energy supply is constrained by high energy prices, stimulating inflation to continue to move higher. Experts believe that energy shortages have led to successive increases in the European consumer price index and increased inflationary pressure, which will also lead to further deterioration of the economic situation in Europe.


The latest news is that, in order to cope with the increasingly severe gas supply situation, the EU issued a "gas saving" regulation on July 20, requiring all member states to reduce gas consumption by 15% this winter. According to the European Commission's announcement, the new regulation requires the 27 EU member states to reduce gas consumption by 15% from August 1, 2022 to March 31, 2023, during which time the Commission will issue a "security alert" in the event of a severe shortage of gas supplies or a sharp increase in gas consumption, forcing The European Commission will issue a "security alert" forcing member states to reduce their natural gas consumption in the event of a serious shortage or a sharp increase in gas consumption.


The shortage of energy supplies means that Europe's economic outlook is sluggish and prices are not falling. Reducing the desire to consume and spend less is the only way for European consumers to effectively cope with the energy jam.