Producer confidence continues to decline

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© ANP / David Rozing
According to Statistics Netherlands (CBS), Dutch manufacturers were less positive for the third consecutive month. Producer confidence declined from 2.1 in May to 1.0 in June. This was largely because manufacturers were less positive about future output and order positions.

Producer confidence was below the long-term average of 1.3 for the first time since March 2021. It reached an all-time high (12.7) in November 2021 and an all-time low (-28.7) in April 2020.

Producer confidence manufacturing industry (seasonally adjusted)
yearmonthbalance (average of the component questions)
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
2021August9.6
2021September11.1
2021October12.3
2021November12.7
2021December10.2
2022January9
2022February8.5
2022March8.7
2022April10.8
2022May9.9
2022June8.1
2022July8.4
2022August4.6
2022September2.6
2022October2.5
2022November3
2022December3.3
2023January3.6
2023February3.7
2023March4
2023April 3
2023May2.1
2023June1

Opinions on future output, order positions and stocks deteriorated

Manufacturers were mainly less positive about the expected output in the next three months and about order positions. Their opinion about current stocks of finished products was also more negative.

Although all three component indicators of producer confidence deteriorated, two were positive. The majority of manufacturers consider their order position to be strong rather than weak, given the time of year. Furthermore, manufacturers anticipating output to increase over the next three months outnumber those expecting a decrease.

However, there was one negative component indicator: more manufacturers define their current stock of finished products as too large rather than too small.

Producer confidence: component indicators (seasonally adjusted)
 June 2023 (balance % positive answers and % negative answers)May 2023 (balance % positive answers and % negative answers)
Producer confidence12.1
Opinion on order books7.28.3
Expected output12.7
Stocks of finished products-5.1-4.6

Producer confidence down in half of industries

In half of the major manufacturing industries, producer confidence deteriorated in June. Just as in the preceding months, confidence was highest in the electrotechnical and machinery industry. Confidence was again lowest in the timber and building materials industry.

Producer confidence by sector (seasonally adjusted)
 June 2023 (average of the component questions)May 2023 (average of the component questions)
Electrotechnical products and machinery14.113.7
Transport equipment7.512
Food, beverages, tobacco1-0.4
Textiles, clothes, leather-0.8-3.2
Metal-2.60.6
Petroleum-5-0.2
Paper and printing-9.1-8.2
Timber and building materials-14.2-14.7

Manufacturing output over 12 percent down in April

In April 2023, the average daily output of the Dutch manufacturing industry was 12.1 percent lower than in April 2022. This is the largest decrease since May 2009. Output also contracted year on year in the three preceding months of this year.

Producer confidence in Germany also deteriorating further

Germany is an important market for the Dutch manufacturing industry. In June, producer confidence among German manufacturers deteriorated further, according to the Business Climate Index of the IFO Institute. Entrepreneurs were considerably more negative about their future business situation and also less positive about their current situation. The average daily output generated by the German manufacturing industry was up by 2.6 percent year on year in April, as reported by Destatis.

Sources

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