This is evident from the producer confidence that the Central Bureau of Statistics (CBS) measures monthly. “In almost all industries, producer confidence was lower in August than a month earlier. The food and tobacco industry is an exception,” Statistics Netherlands reported.
“We mainly saw supply shocks recently,” says Jan-Paul van de Kerke, economist at ABN Amro. After the corona crisis, many sectors had difficulty restarting production, partly due to shortages of raw materials. “We are now seeing that the demand side is being hit.”
The entrepreneurs indicate that they expect less activity in the coming months. “High inflation affects consumers and high energy prices also threaten business,” said the ABN economist. “The drop in confidence was bigger than I expected, but the overall picture is in line with our recent estimate. We assume that the Netherlands will enter a recession at the end of the year. The recession in the rest of the eurozone will also be deeper. The sentiment of the industry confirms this picture.” Consumer confidence has been declining for some time. “The consumer is even more gloomy than during the corona crisis,” says Van de Kerke. “In the meantime, consumers are still spending a lot of money.”
High cost
Entrepreneurs suffer from high costs. Manufacturing output prices were 28% higher in July than a year earlier. Apparently these high costs are only partly passed on to the consumer. On Wednesday, CBS will announce consumer inflation.