Business confidence lower in Q1

© CBS / Nikki van Toorn
At the start of 2019, business confidence stands at 10.6. This is almost three points down on the previous quarter. Nevertheless, it is still well above its long-term average.
A growing number of entrepreneurs are expecting a negative impact from Brexit. This is reported by Statistics Netherlands (CBS), the Dutch Chamber of Commerce (KvK), the Economic Institute for Construction and Housing (EIB), the Dutch Organisation for Small and Medium-Sized Enterprises (MKB-Nederland) and the Dutch Employers’ Organisation (VNO-NCW) as the outcome of the latest Netherlands Business Survey (COEN), which is held among Dutch entrepreneurs in the non-financial private sector.

Business confidence is showing a downward trend for the second quarter in a row. In Q1 2019, the sentiment indicator of entrepreneurial Netherlands is still far above the average level (1.5) as measured since monitoring started in 2008. Business confidence dropped to its lowest level (-29.7) in Q2 2009, while the highest level was reached in Q1 2018: 18.1.

Business confidence in the Netherlands
 Business confidence
2008 Q4-7
2009 Q1-24.3
2009 Q2-29.7
2009 Q3-23.5
2009 Q4-13.5
2010 Q1-7.1
2010 Q20.5
2010 Q33.4
2010 Q46.1
2011 Q17.2
2011 Q210.1
2011 Q33.2
2011 Q4-4.4
2012 Q1-6.3
2012 Q2-6.8
2012 Q3-8.6
2012 Q4-9.2
2013 Q1-10.7
2013 Q2-11.7
2013 Q3-8.7
2013 Q4-2.7
2014 Q11.6
2014 Q24.7
2014 Q32.9
2014 Q44.9
2015 Q15.6
2015 Q25.4
2015 Q38.7
2015 Q47.4
2016 Q19.3
2016 Q28.8
2016 Q37.9
2016 Q49.2
2017 Q114.7
2017 Q215.5
2017 Q315.9
2017 Q413.4
2018 Q118.1
2018 Q214.2
2018 Q315
2018 Q413.4
2019 Q110.6
Source: CBS, EIB, KVK, MKB-Nederland, VNO-NCW
*the horizontal line indicates the long-term average

Highest confidence in the construction sector

Among all industries, construction has the highest level of business confidence level for the tenth quarter in a row: 31.2. Business confidence is also above average in business services and wholesale trade.
In most industries, business confidence is lower in Q1 2019 compared to Q4 2018. Entrepreneurs in car trade and repairs have a negative outlook at the beginning of 2019. Their confidence has declined from 2.7 in Q4 2018 to -5.1 in Q1 2019.

Business confidence, by industry
 Q1 2019 Q4 2018
Non-financial private sector10.613.4
Construction31.233.3
Business services17.116.4
Wholesale and commission trade15.318.4
Information and communication13.716.4
Accommodation and food services11.911.2
Manufacturing5.85.9
Retail trade (excl. cars)4.912.6
Mining and quarrying4.4-14.4
Real estate, renting and business activities3.51
Transport and storage-0.28
Car trade and repairs-5.12.7
Source: CBS, EIB, KVK, MKB-Nederland, VNO-NCW

Growing number of companies expecting problems due to Brexit

An increasing proportion of thenon-financial private sector is foreseeing negative consequences of Brexit for Q1 2019. Nearly 1 out of 4 companies expect their business operations to be hurt by Brexit. According to the entrepreneurs, the freedom of movement of goods and services in particular will be affected (as indicated by 11.5 percent). Eleven percent of entrepreneurs expect a lower volume of trade with the United Kingdom in Q1 relative to the previous quarter. Their turnover developments in Q1 are expected to bear the negative consequences of Brexit as well. Entrepreneurs in agriculture and manufacturing are relatively most likely to expect Brexit to have a negative impact.

Companies expecting Brexit will hurt operations in terms of limited freedom of movement goods and services (%)
 Companies
2017 Q26.8
2017 Q37.4
2017 Q45.9
2018 Q16.3
2018 Q25.6
2018 Q36.8
2018 Q48.5
2019 Q111.5
Source: CBS, EIB, KVK, MKB-Nederland, VNO-NCW

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