Manufacturers increasingly optimistic

23/02/2006 09:30

Producers’ confidence in the manufacturing industry rose to 4.6 in February 2006. This is the highest level since the end of 2000. Manufacturers were more positive about expected production in particular. The number of manufacturing companies who want to raise prices is clearly higher than in 2005.

Manufacturers especially more positive about future production

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

Producers’ confidence in the manufacturing industry was 1.6 points higher in February than in January 2006. This is the fifth month in succession that it is higher than in the four and half years before. Manufacturers have not been as positive as in February 2006 since December 2000.

Dutch manufacturers are especially optimistic about their future production. They are also more positive about their order books and stocks of finished product. Companies manufacturing investment goods in particular are positive about orders, especially about orders from abroad.

Manufacturing industry expects higher prices

The number of manufacturing companies who expect to increase their prices is clearly higher than in 2005. In February 2006, 18 percent of manufacturing companies expect to increase selling prices, while 8 percent foresee lower prices. An average 11 percent expected to increase prices in 2005, while 9 percent expected lower prices. More producers of investment goods and semi-manufactured products expect to increase than to reduce prices. In the consumer goods industry, the number of companies expecting to increase and the number expecting reduce prices just about balance.

The number of manufacturing companies who expect to have to cut back on staff is not much larger than the number who expect to have to recruit more staff: 13 percent want to reduce staff numbers, while 9 percent expect to hire more workers. These figures are at around the same level as in January, and the most positive since June 2001.