Producer confidence hardly changes

© Hollandse Hoogte
According to Statistics Netherlands (CBS), producer confidence among Dutch manufacturers has hardly changed in October 2018. Confidence stood at 5.9 in October, up from 5.7 in September. Producer confidence has been fairly stable over the past three months.

The overall trend has been downward since the start of this year. However, the confidence indicator remains well above its long-term average over the past two decades (0.8). Producer 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)
2014 November2.4
2014 December3.4
2015 January2.8
2015 February2
2015 March1.4
2015 April3.3
2015 May4.1
2015 June4.6
2015 July3.7
2015 August3.5
2015 September3.8
2015 October2.4
2015 November4
2015 December3
2016 January3.2
2016 February3.1
2016 March3.9
2016 April4.7
2016 May4.4
2016 June5.4
2016 July5.1
2016 August1.2
2016 September3.4
2016 October4.3
2016 November3.4
2016 December4.7
2017 January6
2017 February7
2017 March7.8
2017 April8.3
2017 May6.1
2017 June7.2
2017 July6.6
2017 August5.4
2017 September8.5
2017 October8.2
2017 November9.1
2017 December8.9
2018 January10.3
2018 February10.9
2018 March9.5
2018 April8.2
2018 May9.8
2018 June7.7
2018 July6.3
2018 August5.9
2018 September5.7
2018 October5.9

More positive about future output

In October, Dutch manufacturers were more positive about their future output than in the previous month. Manufacturers’ opinions on the order books also improved slightly. However, they were less positive about their stocks of finished products.

Two component indicators of producer confidence are positive and one is in balance. 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 just as many manufacturers who define their stocks of finished products as too small than as too large.

Producers in the wood and building materials industry most positive

For almost two years now, optimism has prevailed across all subsectors of the manufacturing industry. In October, producers in the wood and building materials industry were most positive for the eight consecutive month.

Producer confidence by sector (seasonally adjusted) (average of the component questions)
 October 2018September 2018
Wood and construction16.213.4
Electrotechnical products and machinery108
Textiles, clothes, leather7.210.2
Paper and printing6.29.4
Food, beverages, tobacco62
Transport equipment1.13.1

Industrial capacity utilisation rate slightly lower

At the beginning of Q4 2018, the industrial capacity utilisation rate stood at 84.1 percent. This is slighty lower than in the previous quarter, when the highest level of the capacity utilisation rate in 17 years was reached.

Capacity utilisation rate, first month of the quarter
 Capacity utilisation rate
2015 Quarter 180.4
2015 Quarter 281.8
2015 Quarter 382.3
2015 Quarter 482.3
2016 Quarter 181.2
2016 Quarter 281.5
2016 Quarter 381.7
2016 Quarter 482.2
2017 Quarter 181.3
2017 Quarter 282.8
2017 Quarter 383.4
2017 Quarter 483.3
2018 Quarter 183.5
2018 Quarter 283.6
2018 Quarter 384.5
2018 Quarter 484.1

Manufacturing output over 3 percent up in August

The average daily output generated by the Dutch manufacturing industry was 3.1 percent up in August compared to the same month last year, a higher increase compared to July.For three years now, manufacturing output has continually been above the level of the same period year-on-year. The strongest growth in August 2018 was seen in the transport equipment industry.

German manufacturers again less positive

Germany is an important foreign market for the Dutch manufacturing industry. In October, confidence of German manufacturers (i.e. the IFO index) decreased significantly due to markedly less optimistic business expectations. Growing global uncertainty is increasingly taking its toll on the German economy. The average daily output generated by the German manufacturing industry was almost 1 percent lower in August 2018 than one year previously.

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