Dutch manufacturers less optimistic

26/10/2015 15:00

According to Statistics Netherlands (CBS), confidence among Dutch manufacturers deteriorated in October compared to September. The producer confidence indicator fell from 3.8 in September to 2.4 in October. This is mainly because Dutch manufacturers are less positive about their order books and stocks of finished products.

Confidence among manufacturers is still well above its long-term average over the past two decades (0.4). The indicator reached an all-time high of 9.4 in January 2008, but dipped to an all-time low (- 23.5) more than one year later. Optimism has prevailed among Dutch manufacturers since October 2014.

Producer confidence in manufacturing industry (seasonally adjusted)

Manufacturers less positive about their order books and stocks of finished products

In October, Dutch manufacturers are less positive about their order books and stocks of finished products than in September, but they are more positive about their future output in the next three months.

All three component indicators of producer confidence are positive. Manufacturers who anticipate output to grow outnumber those expecting output to decline over the next three months. Given the time of year, manufacturers who define their order position as strong outnumber those who think their order position is weak. Lastly, manufacturers who think their stocks of finished products are too small constitute a majority over those who define their stocks of finished products as too large.

Capacity utilisation rate remains stable

At the beginning of the fourth quarter of 2015, the capacity utilisation rate in manufacturing reached 82.3 percent, the same percentage as in the third quarter. The rate of 82.3 percent is the highest since the start of the crisis in 2008. With 75.6 percent, the capacity utilisation rate reached a low in the second quarter of 2013.

Capacity utilisation rate, first month of the quarter

Year-on-year decline manufacturing output in August

A couple of weeks ago, CBS reported that the average daily output generated by Dutch manufacturing industry in August 2015 was 0.6 percent down from August 2014. This is mainly due to a downturn in production in the engineering industry, but manufacturing output also still suffers the effects from a major closedown in the tobacco industry. If this is not taken into account, manufacturing output would probably have grown.

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.