Sharper decline in business confidence

© Hollandse Hoogte / Hans van Rhoon
At the beginning of Q4 2019, business confidence - the sentiment indicator of the Dutch private sector – was at a lower level compared to the previous quarter. Nevertheless, entrepreneurs are still in a more positive mood than average. They have a positive outlook for 2020, but it is less positive than last year’s outlook for 2019. 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) on the basis of the Netherlands Business Survey (COEN).

Business confidence
YearQuarterBusiness confidence
2011Q17.2
Q210.1
Q33.2
Q4-4.4
2012Q1-6.3
Q2-6.8
Q3-8.6
Q4-9.2
2013Q1-10.7
Q2-11.7
Q3-8.7
Q4-2.7
2014Q11.6
Q24.7
Q32.9
Q44.9
2015Q15.6
Q25.4
Q38.7
Q47.4
2016Q19.3
Q28.8
Q37.9
Q49.2
2017Q114.7
Q215.5
Q315.9
Q413.4
2018Q118.1
Q214.2
Q315
Q413.4
2019Q110.6
Q212
Q310.6
Q46.6
Source: CBS, KVK, EIB, MKB-Nederland, VNO-NCW

In Q4 2019, business confidence stood at 6.6, down from 10.6 in Q3. The decline in entrepreneurial confidence is visible in most sectors. The greatest deterioration of the sentiment indicator was seen in the information and communication as well as the mining and quarrying sector. The indicator in information and communication stood at 9.5, down from 25.0 in Q3. Business confidence in this sector shows an irregular pattern. In the mining and quarrying sector, the indicator declined to -8.5, while it went down from 10.3 to neutral in the transport sector.

Confidence levels in the construction sector have declined as well, by over 5 points to 15.3. Measures related to management of PFAS contamination and nitrogen pollution possibly play a role here. However, business confidence is still at a high level in this sector.

The only sectors that show an increase in business confidence are the automotive sector (albeit still negative), retail trade and real estate activities.

Business confidence by sector, 2019
BedrijfstakQ4 2019Q3 2019
Non-financial private sector6.610.6
Construction15.320.6
Retail trade (excl. cars)12.97.6
Wholesale and commission trade10.812.9
Information and communication9.525.0
Business services7.415.3
Manufacturing3.63.9
Real estate, renting and business activities2.81.5
Accommodation and food services1.97.4
Transport and storage0.010.3
Car trade and repairs-7.2-12.7
Mining and quarrying-8.58.9
Source: CBS, KVK, EIB, MKB-Nederland, VNO-NCW

Outlook for 2020

Entrepreneurs have different expectations for the year 2020. They have an overall positive outlook, but to a lesser degree than last year for 2019. On balance, 18.9 percent of entrepreneurs anticipate turnover growth in 2020. In the construction and mining and quarrying sectors, entrepreneurs expecting turnover decline outnumber those expecting turnover growth.

On balance, 13.0 percent of entrepreneurs anticipate higher staff numbers in 2020 compared to 2019. On balance, 5.0 percent anticipate higher levels of investment in 2020. There are wide differences between the sectors. For example, on balance 25.6 percent of entrepreneurs in real estate activities expect investments to increase, while in the automotive sector 9.3 percent anticipate investments to decline.

Entrepreneurs' expectations for the coming year (% balance of enterprises anticipating growth and decline)
JaarTurnoverForeign turnoverWorkforceInvestments
20130.811.9-14.3-8.9
201411.716.7-13.1-5.5
201524.318.0-2.14.6
201628.119.05.46.0
201729.115.810.57.9
201830.414.617.710.0
201930.414.517.28.5
202018.910.113.05.0
Source: CBS, KVK, EIB, MKB-Nederland, VNO-NCW

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