Producer confidence hits new record high

© Hollandse Hoogte / Peter Hilz
In July 2021, the mood among Dutch manufacturers has improved. Producer confidence stands at 12.3 this month, up from 11.5 in June, as reported today by Statistics Netherlands (CBS). This means that the record of the previous month has been broken.

The long-term average over the past two decades is 0.4. Producer confidence reached an all-time high (12.3) in July 2021 and an all-time low (-28.7) in April 2020. In July, producer confidence is significantly higher than the long-term average.

Producer confidence manufacturing industry (seasonally adjusted)
yearmonthbalance (average of the component questions)
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
2020July-8.7
2020August-5.4
2020September-4.8
2020October-5.6
2020November-3.8
2020December-0.4
2021January0.6
2021February0.1
2021March3.4
2021April6.5
2021May8.8
2021June11.5
2021July12.3

Manufacturers mainly more positive about order position and stocks

In July, manufacturers are more positive about their order position. Their optimism is at the highest level since 1985. Manufacturers’ opinions on stocks of finished products have also improved. Opinions on future output were roughly the same as in the previous month.

Manufacturers’ opinions on all three component indicators are positive. Manufacturers who anticipate output to increase over the next three months outnumber those expecting a decrease. More manufacturers consider their order position to be strong rather than weak, given the time of year. There are fewer manufacturers who define their current stocks of finished products as too large rather than too small.

Confidence highest in electrotechnical products and machinery industry

In July, producer confidence is highest in the electrotechnical products and machinery industry. However, it has improved the most in the transport equipment industry, mainly because manufacturers are considerably more positive about future output.

Producer confidence by sector (seasonally adjusted)
 July 2021 (average of the component questions)June 2021 (average of the component questions)
Electrotechnical products and machinery23.222.7
Timber and building materials18.822.7
Textiles, clothes, leather18.616.6
Transport equipment15.87.6
Paper and printing13.77.7
Petroleum11.214.9
Metal10.78.3
Food, beverages, tobacco6.65.2

Capacity utilisation rate again higher

The industrial capacity utilisation rate stood at 84.1 percent at the start of Q3 2021. This brought the rate back to the level of 2019.

Capacity utilisation rate, first month of the quarter
   Capacity utilisation rate (%) (%)
Quarter 383.4
Quarter 483.3
2018Quarter 183.5
2018Quarter 283.6
2018Quarter 384.5
2018Quarter 484.1
2019Quarter 183.9
2019Quarter 284.3
2019Quarter 384.3
2019Quarter 484
2020Quarter 182.7
2020Quarter 274.2
2020Quarter 376.9
2020Quarter 479.2
2021Quarter 180
2021Quarter 281.7
2021Quarter 384.1

Manufacturing output 16.5 percent up in May

In May 2021, the average daily output generated by the Dutch manufacturing industry was 16.5 percent up on May 2020. Output was up by 13.1 percent in the previous month. Compared to May 2019, growth stood at 3 percent. This made up for the loss in May 2020 due to the coronavirus crisis.

Producer confidence in Germany declining

Germany is an important foreign market for the Dutch manufacturing industry. In July, German producer confidence is less positive according to the Business Climate Index of the IFO Institute, due to a distinct decrease in optimism in companies’ expectations. In contrast, companies’ assessments of the current situation rose to their highest level since August 2018. Capacity utilisation managed to rise from 85.9 to 87.1 percent, a figure that is considerably higher than the long-term average of 83.5. In May, the average daily output generated by the German manufacturing industry grew by almost 21 percent year-on-year, as reported by Destatis. Compared to May 2019, however, output was still more than 7 percent lower.