Dutch manufacturers remain optimistic

The confidence among Dutch manufacturers fell slightly, but the mood remains optimistic. Statistics Netherlands reported today that optimism has prevailed among Dutch manufacturers since October 2014.

The producer confidence indicator has fallen from 4.6 in June to 3.7 in July, mainly because Dutch manufacturers are less positive about their future output in the next three months, but confidence among manufacturers is still considerably above its long-term average over the past two decades (0.4). In January 2008, the indicator reached an all-time high of 9.4, but dipped to an all-time low (- 23.5) more than one year later.

Producer confidence in manufacturing industry (seasonally adjusted)

Manufacturing industry less positive about future output

In July, manufacturers were less positive about their future output in the next three months than in June. They were also somewhat less optimistic about their order books, but their opinions about their future output and their order books are still considerably above the long-term average. The mood about their stocks of finished products hardly changed.

All component indicators of producer confidence are positive. Manufacturers anticipating their output to decline over the next three months are outnumbered by those expecting their output to grow. Given the time of year, manufacturers who think their order positions are strong prevail over those who think their order positions are weak. The number of manufacturers who think their stocks of finished products are too small (positive) in view of projected sales outnumbered those who think their stocks are too large (negative).

Capacity utilisation rate increased further

At the beginning of the third quarter of 2015, the capacity utilisation rate in manufacturing reached 82.3 percent, the highest level since the start of the recession in 2008. The capacity utilisation rate has grown almost continuously since the third quarter of 2013.

Early July, Statistics Netherlands announced that the average daily output generated by Dutch manufacturing industry in May 2015 was 2.0 percent up from May 2014. Manufacturing output still suffers the effects from a major closedown in the tobacco industry. If this is not taken into account, manufacturing output would have been marginally higher than one year previously.

Capacity utilisation rate, first month of the quarter

Source, StatLine:

For more information on economic indicators, see the Economic Monitor.

Producer confidence consists of three component indicators: manufacturers’ opinions on their order positions, their opinions on their stocks of finished products and the projected output over the next three months.