Manufacturers more pessimistic, business services more optimistic

26/04/2005 09:30

Producers’ confidence in the manufacturing industry is -0.1 in April 2005. Manufacturers are thus significantly less optimistic than in March. According to figures from Statistics Netherlands they are less positive about future production and their order books.

Companies in the business services sector (excl. R&D) on the other hand expect a further increase in turnover and orders in the second quarter of 2005. They also expect to recruit new employees. More than half of companies providing computer services expect to increase employment. 

Manufacturers more sombre about production and orders

Producers’ confidence is a sentiment indicator for the manufacturing industry. The figure is compiled from three component indicators: expected production in the coming three months, opinions on stocks of finished product, and the opinion on the order books.

Producers’ confidence deteriorated in April as fewer manufacturing companies expect production to increase in the coming three months, and they are more negative about their order books. Manufacturers of consumer goods in particular are less positive. Opinions of manufacturing companies on their stocks of finished products are unchanged.

Manufacturing industry expects lower prices

One in ten companies expect lower prices for their products, while only one in sixteen expect prices to rise. Manufacturers of consumer goods in particular expect prices to decrease.

One in six manufacturers expect to reduce staff in the coming moths, while one in seventeen expect to recruit new staff. These expectations hardly differ from those in recent months. April 2001 was the last time that more manufacturers expected to expand than reduce their staff. 

Capacity utilisation down slightly

Capacity utilisation of installations and equipment in the manufacturing industry fell slightly, to 81.9 percent. This is the third quarter in a row that the utilisation rate fell. One in five manufacturers are experiencing impediments in production, with insufficient demand the main reason, just as in the preceding quarters. Manufacturing companies report that their national and international competitive position has deteriorated slightly. In spite of this they expect to realise more turnover abroad.

Business services expect more orders and turnover

Companies in the business services sector expect more orders and a higher turnover in the second quarter of 2005. They have not been so optimistic about orders and turnover since the end of 2000. This optimism is apparent for all three sectors included in the survey: computer service bureaus, lease companies and other business services, which include temp agencies, advertising agencies, cleaners, engineering firms, and accountants and administrators. 

Most computer service bureaus want more staff

One in three companies in the business services sector expect to employ more people in the second quarter of 2005, while only one in nine expect to have to reduce their staff. Companies in this sector have not been this optimistic about employment for the last four years. Computer services bureaus beat other companies in this respect: more than half of them expect to recruit new staff.

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