Entrepreneurs in the Dutch industry have become less optimistic, according to recent data. The producer confidence index dropped from 3.0 in April to 2.1 in May, as reported by the Dutch Central Bureau of Statistics (CBS). This decline can be attributed to entrepreneurs expressing less positivity regarding their order portfolios.
Despite the decrease, the current producer confidence level remains above the average of 1.3 observed over the past 20 years. The highest level of confidence among entrepreneurs was reached in November 2021, with a value of 12.7. Conversely, the lowest level was recorded in April 2020 at -28.7.
The assessment of the order position, expected business activity, and inventory levels all contributed to the deteriorating confidence. Entrepreneurs expressed a more negative outlook on their order portfolios and the expected production in the coming three months. They also held a less favorable opinion of their finished product inventories.
Two sub-indicators of the producer confidence index showed positive results. The number of entrepreneurs who considered their order positions to be large outweighed those who found their order portfolios to be insufficient for the time of the year. Additionally, a greater number of entrepreneurs expected an increase in production over the next three months compared to those anticipating a decrease.
However, one sub-indicator remained negative. The number of entrepreneurs perceiving their finished product inventories as too small was lower than those who considered their inventories to be too large.
The decline in producer confidence was observed across most industrial sectors in May. Similar to previous months, entrepreneurs in the electrical engineering and machinery industries remained the most positive. Conversely, entrepreneurs in the wood and construction materials industry were the least optimistic.
Germany, being a crucial market for the Dutch industry, also experienced a decline in producer confidence among its entrepreneurs in May, as indicated by the IFO index. German entrepreneurs expressed more negativity about their future business situation and less positivity about their current business situation. According to Destatis, the average daily production of the German industry in March was 3.6 percent higher than the previous year.
Overall, these developments reflect the changing sentiments among entrepreneurs in the Dutch and German industries, suggesting a potentially challenging period ahead.