Business confidence up in Q1 2023

© Nikki van Toorn (CBS)
At the start of Q1 2023, entrepreneurial confidence increased from slightly negative to positive (6.4). The sentiment indicator rose across all sectors, except for real estate activities. In addition, expectations about the economic climate for the next three months were predominantly negative in early 2023, but less negative than in the previous quarter. The investment outlook for the current year is less positive than one year previously. 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).

The data for this survey were collected in January.

In 2022, the confidence indicator fluctuated and at the end of the year was negative for the first time since early 2021. At the start of 2023, business confidence showed a tentative recovery and stood at 6.4.

Business confidence
JaarKwartaalBusiness confidence
Source: CBS, EIB, KVK, MKB-Nederland, VNO-NCW

Positive sentiment in most sectors

Business confidence was positive across virtually all sectors at the beginning of 2023. One quarter previously, the sentiment indicator was still negative in five of the eleven sectors for which business confidence is measured. The increase was sharpest in accommodation and food services, where sentiment turned from negative to positive, just as in wholesale trade. In the mining and quarrying sector, the indicator was negative despite an increase. Only in real estate activities did business confidence fall, remaining negative. Turnover expectations in particular deteriorated among real estate entrepreneurs, on balance. In construction, business confidence was the highest of all sectors. This was mainly due to positive opinions on the order position and expectations about increasing staffing levels.

Business confidence by sector
BedrijfstakQ1 2023Q4 2022
Non-financial private sector6.4-0.9
Car trade and repair11.65.5
Information and communication10.25.9
Business services8.73.3
Wholesale and commission trade7.4-2.7
Retail trade (excl. cars)3.51.0
Transportation and trade3.5-1.5
Accommodation and food services3.2-12.2
Real estate activities-5.5-2.9
Mining and quarrying-6.6-19.6
Source: CBS, EIB, KVK, MKB-Nederland, VNO-NCW

Economic climate expectations negative but improving

At the beginning of Q1 2023, on balance 14 percent of entrepreneurs expected a deterioration of the economic climate in the next three months. This was 24 percent one quarter previously. Pessimism has prevailed among entrepreneurs since last year; expectations about the economic climate fell in each quarter of 2022.

Also within most sectors, on balance entrepreneurs were less pessimistic about the expected economic climate at the start of 2023 than three months earlier. Just as in the previous quarter, entrepreneurs in construction and in accommodation and food services were the most pessimistic of all sectors. In the sectors real estate activities, information and communication, and mining and quarrying, however, expectations fell further. Entrepreneurs in manufacturing and in business services had the least pessimistic outlook at the start of this year; on balance, 5 percent anticipated a deterioration of the economic climate.

Expectations about economic climate by sector
PeriodenQ1 2023 (% balance of enterprises expecting improvement vs. deterioration)Q4 2022 (% balance of enterprises expecting improvement vs. deterioration)
Non-financial private sector-13.5-23.8
Business services-4.6-10.6
Information and communication-6.1-2.0
Culture, sports and recreation-9.5-27.7
Car trade and repair-10.8-15.9
Transportation and storage-10.9-19.6
Wholesale and commission trade-11.5-28.3
Other services-11.5-23.6
Agriculture, forestry and fisheries-19.4-42.1
Mining and quarrying-20.9-8.5
Real estate activities-22.1-18.3
Retail trade (excl. cars)-24.9-32.4
Accommodation and food services-26.4-38.2
Source: CBS, EIB, KVK, MKB-Nederland, VNO-NCW

Investment outlook for 2023 less positive

At the start of Q1 2023, on balance 3 percent of entrepreneurs expected an increase in investment for the current year. This was 8 percent one year previously.

Within most sectors, entrepreneurs expected investments to increase. However, expectations varied widely by sector. In the sector real estate activities, on balance 27 percent of entrepreneurs anticipated investment growth. Entrepreneurs in accommodation and food services also expected to invest more in 2023, on balance. The sectors retail trade, construction and agriculture, on the other hand, foresaw a drop in investment for 2023.

Expected investments for the reporting year by sector
PeriodenQ1 2023 (% balance of enterprises expecting an increase vs. a decrease)Q1 2022 (% balance of enterprises expecting an increase vs. a decrease)
Non-financial private sector3.18.1
Real estate activities27.331.6
Culture, sports and recreation14.8-7.4
Mining and quarrying12.525.2
Information and communication11.72.2
Other services8.6-8.9
Transportation and storage6.626.1
Car trade and repair6.12.3
Wholesale and commission trade6.016.4
Business services4.58.8
Accommodation and food services1.4-11.0
Retail trade (excl. cars)-5.80.2
Agriculture, forestry and fisheries-18.93.4
Source: CBS, EIB, KVK, MKB-Nederland, VNO-NCW