Producers' confidence almost unchanged

Producers’ confidence in the manufacturing industry is 2.6 in December 2005. This means that manufacturing companies were almost just as positive as in November. They are more content with their order books, but slightly less optimistic than last month about  future production levels. The number of manufacturers who expect to raise their prices has increased, according to figures from Statistics Netherlands.

Manufacturers more positive about orders

Producers’ confidence is a sentiment indicator for the manufacturing industry. The figure consists of three components indicators: expected production in the next three months, opinions on stock of finished products and opinions on orders received.

Producers’ confidence in the manufacturing industry is 0.4 of a point lower in December than in November. However, for the third month in a row it is relatively high. The last time it was at a comparable level was in 2001, when the Dutch economy was in a period of high growth.

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. Lastly, they are slightly more negative in their opinions on stocks of finished product.

Manufacturers considering raising prices

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.