The mood among Dutch manufacturers improved marginally. After four consecutive months of declining confidence, the producer confidence index inched up 1.4 points in January 2009. Producer confidence now stands at -19.7. In December 2008, the index reached the lowest level ever.
Producer confidence consists of three component indicators: expected output in the next three months, producers’ opinions on their stocks of finished products and their opinions on their order books.
In January, manufacturers were less pessimistic with respect to their future output than one month previously. Still, the number of manufacturers expecting output to increase was seriously outnumbered by those anticipating a decline. Manufactures were more negative about their stocks of finished products; the number of manufacturers reporting high stock levels grew. Their opinions on their order positions deteriorated somewhat. Over the past two decades, Dutch manufacturers have not been this negative with respect to their order positions.
The degree of capacity utilisation also dropped to the lowest level ever and stood at 76.7 percent in January, compared to 83.0 percent in October 2008. Nearly one third of manufacturers considered insufficient demand to be an important obstacle to production. According to Dutch manufacturers, their competitive position on the foreign market deteriorated. They also expect sales on the foreign market to drop. Dutch manufacturers reported that their competitive position on the domestic market had hardly changed.
Manufacturers indicated that the value of orders received had declined in the last three months. The order position index (orders received expressed in months of work) dropped from 106.8 in December to 104.4 in January.
Figures on producer confidence in 2008 have been adjusted as a result of the annual revision of seasonal factors.
Producer confidence in manufacturing industry