Manufacturers again less confident

According to Statistics Netherlands (CBS), Dutch manufacturers were less confident for the second consecutive month. Confidence stood at 6.3 in July, down from 7.7 in June. In July, manufacturers were mainly less positive about their order books and the future output than in the previous month.

However, the confidence indicator remains well above its long-term average over the past two decades (0.8). Business confidence reached an all-time high (10.9) in February 2018 and an all-time low (-23.5) in February 2009. Since October 2014, optimism has prevailed among Dutch manufacturers.

Producer confidence manufacturing industry (seasonally adjusted) (average of the component questions)
   balance
2014A0
S-0.2
O2
N2.4
D3.4
2015J2.8
F2
M1.4
A3.3
M4.1
J4.6
J3.7
A3.5
S3.8
O2.4
N4
D3
2016J3.2
F3.1
M3.9
A4.7
M4.4
J5.4
J5.1
A1.2
S3.4
O4.3
N3.4
D4.7
2017J6
F7
M7.8
A8.3
M6.1
J7.2
J6.6
A5.4
S8.5
O8.2
N9.1
D8.9
2018J10.3
F10.9
M9.5
A8.2
M9.8
J7.7
J6.3

Less positive about order books and future output

In July, Dutch manufacturers were less positive about their order books and their future output than one month previously. However, they were slightly more positive about their stocks of finished products.

All component indicators of producer confidence are positive. Manufacturers anticipating output growth over the next three months outnumber those expecting output decline. More manufacturers consider the number of received orders to be large rather than small, given the time of year. There are also more manufacturers who define their stocks of finished products as too small rather than too large.

Producers in the wood and building materials industry most positive

For more than one year now, optimism has prevailed across all subsectors of the manufacturing industry. In July, producers in the wood and building materials industry were again most positive.

Producer confidence by sector (seasonally adjusted), July 2018 (average of the component indicators)
 balance
Wood and
construction
21.1
Textiles,clothes,leather9.6
Transport
equipment
8.8
Petroleum8.7
Paper and printing8.1
Electrotechnical products
and machinery
5
Metal5
Food,beverages,tobacco2.5

Industrial capacity utilisation rate at highest level in 17 years

At the beginning of Q3 2018, the industrial capacity utilisation rate stood at 84.5 percent. This is the highest level of the capacity utilisation rate in 17 years.

Capacity utilisation rate, first month of the quarter (%)
   capacity utilisation rate
IV80.3
2015I80.4
II81.8
III82.3
IV82.3
2016I81.2
II81.5
III81.7
IV82.2
2017I81.3
II82.8
III83.4
IV83.3
2018I83.5
II83.6
III84.5

Manufacturing output over 3 percent up in May

The average daily output generated by the Dutch manufacturing industry was 3.2 percent up in May compared to the same month last year. The growth rate was lower than in April. For over two and a half years now, manufacturing output has continually been above the level of the same period year-on-year. The strongest growth in May 2018 was seen in the machinery industry.

Confidence among German manufacturers again slightly less positive

Germany is an important foreign market for the Dutch manufacturing industry. Confidence (i.e. the IFO index) fell for the sixth consecutive month. Nevertheless, the index remains significantly above its long-term average. The average daily output generated by the German manufacturing industry was almost 4 percent higher in May 2018 than one year previously.

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