Producer confidence in the manufacturing industry hardly changed and was 2.6 in December 2005. For the third month in a row it is relatively high. The last time it was at a comparable level was in the first months of 2001, when the Dutch economy was in a period of high growth.
Producer confidence is the mood indicator for the manufacturing industry. The figure consists of three component indicators: expected production over the next three months, manufacturers’ opinions on the stock of finished products and the order position.
Dutch manufacturers are slightly less positive about future production than in November. On the other hand they are more positive about their order books: they have received more orders from within and outside the Netherlands, and their order books are well stocked. They are slightly more negative in their opinions on stocks of finished product.
More manufacturing companies are considering raising the prices of their products. In December 21 percent of companies expect to increase prices while 11 percent expect to reduce them. Producers of semi-manufactured products and capital goods expect net to increase their prices, while producers of consumer goods expected to reduce them.
The positive producer confidence has hardly resulted in plans to increase employment. Only 6 percent of manufacturing companies expect to employ more staff, while as many as 16 percent expect to reduce staff in the next three months. These percentages have hardly changed in the last one and a half years.
According to the Institut für Wirtschaftsforschung (IFO), producer confidence of German manufacturing companies improved in December. German manufacturers are clearly more confident regarding their business expectations for the next six months. They expect even stronger impulses from export business.
Just as in the Netherlands the IFO indicator of producer confidence in Germany has shown an upward trend in the second half of 2005.
Producer confidence in manufacturing industry