Business confidence remains negative across almost most sectors

Business confidence is negative at the beginning of the third quarter of this year. The mood indicator now stands at 8.3 negatives. This means the confidence remained the same as three months earlier and is negative in almost all sectors. Furthermore, expectations about purchase orders and investments have declined.

This was reported on Tuesday by Statistics Netherlands, together with 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).

At the beginning of the third quarter of this year, business confidence was negative across almost all sectors, with exceptions in the information and communication, and culture, sports, and recreation sectors. These areas, along with retail trade, saw improving confidence for three consecutive quarters. Confidence grew in construction and real estate, yet remained the lowest. The biggest decline in confidence was noted in car maintenance, repair services, and wholesale trade.

Overall, entrepreneurs’ outlook on order positions was pessimistic, marking a decline from the previous year. At the start of the third quarter, a net 2 percent of businesses anticipated a drop in order values over the next quarter. It is the first time that the expected order position is negative since the beginning of 2021

Most sectors showed a less optimistic or more pessimistic forecast for order positions compared to last year. The most significant drops were in culture, sports, recreation, manufacturing, and car trade and repair. The car trade and repair sector were the most negative, with nearly 15 percent expecting worsening order positions. In contrast, the accommodation and food service sector remained the most optimistic, with about 9 percent anticipating more orders.

17 percent of entrepreneurs predicted more investments compared to 2022, while 16 percent anticipated a decrease and 67 percent foresaw stable investments. This low level of investment optimism has not been observed since early 2021. The largest drop in investment predictions is in the accommodation and food services sector. Entrepreneurs in agriculture, forestry, fisheries, and construction are most pessimistic about this year’s investments. The culture, sports, and recreation sector remains the most optimistic.