Manufacturing industry more optimistic

27/06/2006 09:30

The optimism among manufacturing companies has increased in June. They have not been this positive since the end of 2000. They are more positive about future production and their order books, and also about stocks of finished products. Manufacturing companies do not expect employment in their sector to decrease, according to figures from Statistics Netherlands.

Manufacturers more positive across the board

Producer  confidence is a sentiment indicator for the manufacturing industry. The figure consists of three component indicators: expected production in the next three months, opinions on stocks of finished products and opinions on orders received. Manufacturers answered all three questions more positively than last month.

Producer confidence is 6.4 in June, the highest level since November 2000. In May confidence fell slightly, but this was completely rectified in June. 

Producers of investment and consumer goods, in particular, were more positive about their future production. Satisfaction with the order books rose by most among producers of semi-manufactured products. The order books of the Dutch manufacturing industry, expressed in months of work have not been this full since January 1993. The number of manufacturers who think their stocks of finished product are too large has decreased; the number who think that stocks are too low has increased. 

Manufacturers expect no further decrease in employment

In June 2006, 11 percent of manufacturing companies expect employment to decrease in the coming three months. Ten percent of companies expect to recruit more staff. The percentage of manufacturers who want to reduce staff has not been this low since January 2001. It would seem that the decrease in employment in the manufacturing industry is coming to an end. The number of manufacturers of investment goods who expect to recruit more staff is already larger than the number who expect to reduce staff.

In the coming three months, 15 percent of manufacturers expect to raise their prices, while only 3 percent expect to lower them. The number of manufacturers who expect lower prices continues to decrease, especially among producers of consumer goods. Producers of semi-manufactured products and investment goods, on the other hand, expect prices to increase.