The Dutch manufacturing industry was in a clearly more optimistic mood in May 2004 than in April. Producers’ confidence rose to 1.8, a substantial rise on the April figure of -1.4. This is the highest score for producers’ confidence among manufacturers since February 2001. According to figures from Statistics Netherlands, the confidence indicator has been increasing since the low point of the present business cycle in June 2003.
More orders, higher expected production
An increase in producers’ confidence by 3.2 points is quite exceptional. All three components of the sentiment indicator for the manufacturing industry showed an improvement. The three component indicators are: expected production in the coming three months, opinions on stocks of finished product and opinions on the order books position.
The number of manufacturers who expect production to rise is increasing. Fewer and fewer companies think their stocks of finished products are too large, and the order books position has improved for the ninth month in a row.
Producers of semi-manufactures and capital goods are significantly more optimistic about expected production and their order books than producers of consumer goods.
Producers confidence has shown a much greater improvement than consumer confidence (also released today) so far this year. This has been accompanied by an improvement in the economy in which exports have picked up but consumption by households is still lagging.
More orders received
Manufacturing companies report that they have received more orders both from at home and abroad. Their order position has improved. Producers of semi-manufactures and capital goods are more satisfied with the orders they have received than manufacturers of consumer goods.
A net one in eleven manufacturing companies expect to have to cut back on staff in the coming months. This is significantly fewer than in 2003. One in twelve companies expect to raise their prices, this is significantly more than in 2003. Manufacturers of semi-manufactured products in particular expect to have to increase their prices.
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