Producer confidence continues to recover

© Hollandse Hoogte / Hans van Rhoon
In June, confidence among Dutch manufacturers was again less unfavourable. Producer confidence now stands at -15.1, up from -25.1 in May, as reported today by Statistics Netherlands (CBS). This is the largest improvement in the span of one month since the start of the survey, mainly due to notably 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 has prevailed among Dutch manufacturers since April 2020.

Producer confidence manufacturing industry (seasonally adjusted)
yearmonthbalance (average of the component questions)
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
2020June-15.1

Unprecedented improvement in opinions on future output

In June, opinions on future output have improved substantially. The historic drop in April has largely been reversed over the subsequent two months. Manufacturers are also slightly less negative about their order position. However, their opinion on stocks of finished products has deteriorated slightly.

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
2020June-14.7

Improved confidence among producers in all sectors

In all sectors of the industry, producer confidence is less negative than it was in May. This is particularly the case in the timber and building materials industry. Entrepreneurs in this sector are also the least negative. The most negative were entrepreneurs in the metal industry; their confidence has hardly improved.  

Producer confidence by sector (seasonally adjusted)
 June 2020 (average of the component questions)May 2020 (average of the component questions)
Timber and building materials-1.3-21
Electrotechnical products and machinery-8.3-20
Transport equipment-11.6-25.5
Food, beverages, tobacco-12.7-22.2
Paper and printing-14.2-24
Petroleum-14.7-23.6
Textiles, clothes, leather-27.3-30.1
Metal-28.8-29.7

Manufacturing output 11 percent down in April

In April 2020, the average daily output generated by the Dutch manufacturing industry was 11 percent down on April 2019. Output showed the largest year-on-year decrease since mid-2009.

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, in June producer confidence is significantly less negative than it was in May. This is entirely attributable to notably improved opinions on future output. It is the strongest improvement in expectations on record. However, opinions on the current situation remain negative. In April, the average daily output generated by the German industry contracted by 31 percent year-on-year, as reported by Destatis.

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