The mood among Dutch manufacturers deteriorated in August. Statistics Netherlands announced today that the producer confidence indicator fell from 1.2 in July to 0 in August. The lower confidence level is mainly due to the fact that producers tend to be more negative about their order positions.
Confidence among manufacturers is currently just below its long-term average over the past twenty years (0.5). In January 2008, the indicator reached an all-time high of 9.4 and in February 2009 the indicator reached an all-time low (- 23.5).
Producer confidence in manufacturing industry
More negative about their order positions
Manufacturers were more negative about their order positions in August. In the previous month, they were optimistic about their order positions for the first time since July 2011. They were also more negative in August about their output over the next three months, but they were more positive about their stocks of finished products.
Economic growth in the second quarter of 2014 relative to the first quarter
European economies faltering
The Dutch manufacturing industry mainly exports to the surrounding countries. These countries struggle with their faltering economies. The German and Italian economies contracted in the second quarter of 2014 relative to the first quarter, while France had zero economic growth. The economy of Belgium grew marginally. Only the economy in the United Kingdom showed considerable economic growth.
Germany is the most important foreign market for the Netherlands. The confidence of German manufacturers peaked in April and subsequently fell during the next for months. German manufacturing output has fallen every month since January.
Dutch consumers also more pessimistic
Last week, Statistics Netherlands published about the declining consumer confidence in August. The declining confidence of producers and consumers is consistent with the tense political situation on the international level.
Producer confidence is a component indicator of business confidence and runs one month ahead of business confidence. At the beginning of the third quarter, business confidence in the Netherlands decreased marginally, but the mood remains positive. Business confidence is a quarterly indicator, whereas producer confidence is available on a monthly basis.
More figures can be found in dossier Business cycle.
For more information on economic indicators, the reader is referred to the Economic Monitor.