Mood among manufacturers improving further

In April 2010, Dutch manufacturers were less pessimistic than in March 2010. The producer confidence index rose from -3.1 to -1.4, the highest level in eighteen months. This improvement was mainly caused by the fact that manufacturers expect to step up their output in the months to come. April was the fourth month in a row, in which producer confidence increased.

Producer confidence consists of three component indicators: expected output in the next three months, producers’ opinions on stocks of finished products and their opinions on their order books.

Manufacturers were far more optimistic about their production over the next three months than in March. Their opinions on the stocks of finished products also improved, though to a much lesser degree. Manufacturers’ opinions on their order position hardly changed.

Dutch manufacturers reported a substantial increase in the value of orders received in April. The order position index (orders received expressed in months of work) rose from 99.5 to 100.0.

Manufacturers were slightly less negative about future employment in their branch than in March. However, manufacturers expecting employment in their branch to increase in the next three months were still severely outnumbered by those expecting a downturn.

Compared to three months previously, insufficient demand was mentioned by fewer manufacturers as a factor to slow down production. In April, 30 percent of manufacturers considered insufficient demand to be an obstacle versus 41 percent in January.

Manufacturers were much more optimistic about their future sales abroad than three months previously. The number of manufacturers expecting an increase in foreign sales in the next three months was much larger than the number expecting a decline.

The capacity utilisation rate rose from 77.3 percent in January to 78.7 percent in April. In spite of the increase, the capacity utilisation rate was still extremely low. In the period 1989–2008, manufacturing industry continually used 80 to 87 percent of its production capacity.

Producer confidence in manufacturing industry