Producer confidence at record high again

27/02/2018 15:00
According to Statistics Netherlands (CBS), confidence among Dutch manufacturers stood at 10.9 in February, up from 10.3 in January. Never before were manufacturers so optimistic. In January, the previous record was also surpassed. In February, manufacturers were far more positive about their future output than in January. However, they were slightly less optimistic about their stocks of finished products and about their order positions.

The confidence indicator is well above its long-term average in the past two decades (0.7). Business confidence reached an all-time low (-23.5) in February 2009. Since October 2014, optimism has prevailed among Dutch manufacturers.

All component indicators positive for a year

All component indicators of producer confidence have been positive for a year now. Manufacturers anticipating output growth over the next three months outnumber those expecting output decline. More manufacturers consider the number of orders they receive to be large, rather than small, given the time of year. The number of manufacturers defining their stocks of finished products as too small is also larger than those who define them as too large.

Manufacturers also very optimistic about employment

Manufacturers are also extremely positive about future employment in their company. In February 2018, nearly 21 percent of manufacturers expected an increase and over 6 percent a decline. Hence, the balance of positive and negative answers was 15 percent, the highest figure in nearly 28 years.

Producers in transport equipment industry most positive

Already for more than a year, optimism has prevailed across all subsectors of the manufacturing industry. Most optimistic in February were producers in the transport equipment industry and the wood and building materials industry. Compared to the previous month, producer confidence rose most among manufacturers of food, beverages and tobacco.

More than two weeks ago, CBS reported output generated by the transport equipment industry was over 20 percent up in December 2017 relative to the same month in 2016. Output generated by the wood and building materials industry grew by 8 percent.

Manufacturing output over 5 percent up in December

The average daily output generated by the Dutch manufacturing industry was 5.2 percent up in December 2017 compared to the same month one year previously. The growth rate was slightly higher than in November. For over two years now, manufacturing output has continually been above the level of the same period year-on-year.

German manufacturers less positive

Germany is an important foreign market for the Dutch manufacturing industry. Confidence (i.e. the IFO index) dropped in February after hitting a record high in January. The average daily output generated by the German manufacturing industry was nearly 8 percent higher in December 2017 than one year previously.

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