Producer confidence recovering slightly

© Hollandse Hoogte / Westend61 GmbH
On account of the COVID-19 crisis, in April 2020 producer confidence plummeted to its lowest level since the start of the producer confidence survey in 1985. Confidence among Dutch manufacturers has recovered slightly in May and now stands at -25.1, up from -28.7 in April, as reported today by Statistics Netherlands (CBS). This was mainly due to improved expectations on future output.

The long-term average over the past two decades is 0.6. Producer confidence reached an all-time high (10.9) in February 2018 and reached an all-time low (-28.7) in April 2020. Pessimism prevails among Dutch manufacturers since April 2020.

Producer confidence manufacturing industry (seasonally adjusted)
yearmonthbalance (average of the component questions)
2016June5.4
2016July5.1
2016August1.2
2016September3.4
2016October4.3
2016November3.4
2016December4.7
2017January6
2017February7
2017March7.8
2017April8.3
2017May6.1
2017June7.2
2017July6.6
2017August5.4
2017September8.5
2017October8.2
2017November9.1
2017December8.9
2018January10.3
2018February10.9
2018March9.5
2018April8.2
2018May9.8
2018June7.7
2018July6.3
2018August5.9
2018September5.7
2018October5.9
2018November7.2
2018December7.5
2019January5.8
2019February6.3
2019March6.1
2019April6.7
2019May4.7
2019Juni3.3
2019Juli 3.9
2019August3.9
2019September3.3
2019October3.6
2019November2.8
2019December2.9
2020January2.5
2020February3.7
2020March0.2
2020April-28.7
2020May-25.1

Opinions on future output less negative

Dutch manufacturers have never been more negative about their future output than in April. In May, expectations have improved but are still at the second lowest level ever. Manufacturers are also slightly less negative about their stocks of finished products, while their opinions on the order position deteriorated further. 

All component indicators of producer confidence are negative. Manufacturers who anticipate output decline over the next three months outnumber those expecting output growth. More manufacturers consider their order position to be weak rather than strong, given the time of year. There are more manufacturers who define their current stocks of finished products as too large rather than too small.

Future output (seasonally adjusted)
yearmonthbalance (balance % positive and % negative answers)
2016August-1
2016September3.4
2016October8.7
2016November4.9
2016December5.9
2017January6.2
2017February8.3
2017March9.7
2017April9.8
2017May6.1
2017June7.1
2017July6
2017August4.9
2017September12.2
2017October9.8
2017November9.6
2017December7.4
2018January13.3
2018February16
2018March12.6
2018April9
2018May13.3
2018June8.3
2018July5
2018August4.3
2018September3.3
2018October5.2
2018November6.7
2018December10
2019January5.6
2019February3.6
2019March2.8
2019April3.3
2019May0.9
2019June-1.2
2019July-0.1
2019August2
2019September2
2019October3.1
2019November1.4
2019December0.4
2020January1.8
2020February3.1
2020March-8
2020April-65
2020May-44.9

Producer confidence slightly less negative in most sectors

In most sectors of the industry, producer confidence is less negative than it was in April, particularly in the transport equipment industry. Entrepreneurs in the electrotechnical products and machinery industry were the least negative. However, confidence levels in the food, beverages and tobacco industry as well as in the paper and printing industry deteriorated further.

Producer confidence by sector (seasonally adjusted)
 May 2020 (average of the component questions)April 2020 (average of the component questions)
Electrotechnical products and machinery-20-27.1
Timber and building materials-21-25.2
Food, beverages, tobacco-22.2-18.3
Petroleum-23.6-25.3
Paper and printing-24-20.7
Transport equipment-25.5-46
Metal-29.7-32.7
Textiles, clothes, leather-30.1-38.9

Manufacturing output 2.5 percent down in March

In March 2020, the average daily output generated by the Dutch manufacturing industry was 2.5 percent down on March 2019. Output showed a year-on-year decrease of 1.3 percent in the preceding month.

Confidence among German manufacturers slightly less negative

Germany is an important foreign market for the Dutch manufacturing industry. According to the Business Climate Index of the IFO Institute, confidence among German manufacturers is slightly less negative in May than it was in April. This is mainly due to slightly less negative opinions about future output. Manufacturers’ opinions on the current situation have deteriorated. In March, the average daily output generated by the German industry contracted by 14 percent year-on-year, as reported by Destatis.

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