Producers less optimistic

The mood among Dutch manufacturers has deteriorated in July. The producer confidence index was 2.4 in July, as against 5.3 in June. The mood among manufacturers is positive, but they are less optimistic than at the beginning of 2008.

Producer confidence consists of three component indicators: expected output in the next three months, producers’ opinions about their stocks of finished products and their opinions on their order books.

The decline in producer confidence is mainly due to expected output. Manufacturers were cautious in July with respect to their future output expectations, whereas a month ago they were still optimistic. They thought their order positions had marginally worsened, but they were still positive. Their opinions on the stocks of finished products did not change.

In July, the number of manufacturers reporting an increase in orders received virtually equalled those reporting a decline. Manufacturers were less positive about orders received than in June. The order position index (orders received expressed in months of work) decreased slightly to 116.0.

According to Dutch manufacturers, their competitive position on the foreign market somewhat deteriorated, although manufacturers expect an increase in foreign sales in the next three months. On the domestic market, their competitive position hardly changed. With 83.4 percent, July’s capacity utilisation rate of production installations equalled that in April.

Producer confidence in manufacturing industry