Manufacturing industry less optimistic

23/05/2006 09:30

Dutch manufacturing companies are still in a positive mood in May. They are considerably less optimistic than in previous months, however. This is mainly because they are less positive about future production. Producers of semi-manufactured products expect to raise the prices of their products, according to figures from Statistics Netherlands. 

Manufacturers less positive about future production

Producer confidence in the manufacturing industry is a sentiment indicator for the manufacturing industry. The figure consists of three component indicators: expected production in the next three months, opinion on stocks of finished products and opinion on orders received.

Producer confidence in the manufacturing industry is 3.3 in May. Last month it was 6.1. The decrease in confidence this month follows four months of growth. Producer confidence is now back at the level around the turn of the year.

Dutch manufacturers are especially less positive about expected production in the next three months. This tempered optimism is reported by producers of investment goods and of consumer goods. In addition, manufacturers are slightly less satisfied with stocks of finished products than last month. Opinions on their orders are unchanged, and still very positive.

Producers of semi-manufactures expect to raise prices

In May 2006, 14 percent of manufacturers expect to raise the prices of their products, while 6 percent expect lower prices. The number of manufacturing companies who expect higher prices has thus not changed much from last month. Expectations for higher prices are concentrated in the sector producing semi-manufactured goods. Only a small majority of companies producing investment goods expect to raise prices. In the consumer goods industry, companies who foresee lower prices have a slight majority.

Manufacturing companies do not expect to increase their workforce yet. Around 13 percent want to reduce staff, while 9 percent expect to recruit more workers in the next three months. This is slightly more negative than in the last two months.