Recovery of producer confidence is faltering in October

The long-term average over the past two decades is 0.3. Producer confidence reached an all-time high (10.9) in February 2018 and an all-time low (-28.7) in April 2020. Pessimism has prevailed among Dutch manufacturers since April 2020.

Manufacturers again more negative about future output

In October, manufacturers’ opinions on future output have deteriorated slightly for the third consecutive month. However, they are less negative about their order position and more positive about their stocks of finished products.

Manufacturers’ opinions on their stocks of finished products are positive. There are fewer manufacturers who define their current stocks of finished products as too large rather than too small.

The other two component indicators are negative. Manufacturers who anticipate output to decrease over the next three months outnumber those expecting output to increase. More manufacturers consider their order position to be weak rather than strong, given the time of year.

Producers in timber and building materials industry most positive

Producers in the timber and building materials industry are the most positive. It is notable that the entrepreneurs in the transport equipment industry are positive as well. In the other industries, producers are not positive. The most negative opinions are again found among entrepreneurs in the metal industry.

Capacity utilisation rate higher

The industrial capacity utilisation rate stood at 79.2 percent at the start of Q4 2020. This was higher than the 76.9-percent rate at the start of Q3. The long-term average over the past two decades is 81.3 percent.

Manufacturing output 4 percent down in August

In August 2020, the average daily output generated by the Dutch manufacturing industry was 4.0 percent down on August 2019. The year-on-year decrease is smaller than in the previous four months.

Confidence among German manufacturers continues to improve

Germany is an important foreign market for the Dutch manufacturing industry. According to the Business Climate Index of the IFO Institute, producer confidence has improved in October for the sixth consecutive month and is back in positive territory for the first time since June 2019. A great many more companies were satisfied with their current situation. However, recent optimism about the coming months has evaporated. In the past quarter, capacity utilisation increased considerably, from 75.3 points to 79.8 points. In August, the average daily output generated by the German industry contracted by almost 12 percent year-on-year, as reported by Destatis.