Entrepreneurs in COVID-impacted sectors are pessimistic

© CBS
In Q1 2021, business confidence has declined slightly and is still negative. Confidence has dropped in sectors directly affected by the lockdown measures, while other sectors are projecting growth. In accommodation and food services and in culture, sports and recreation, a majority of entrepreneurs say they have closed 2020 with a loss. In these sectors, as well as in other services, entrepreneurs are also more concerned about business continuity. This is reported by Statistics Netherlands (CBS), 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) on the basis of the Netherlands Business Survey (COEN).

The data for this survey were collected at the beginning of January 2021.

In Q2 2020, the coronavirus crisis caused an unprecedented decline in entrepreneurial confidence. As a result, the sentiment indicator hit its lowest level since monitoring started in 2008. Confidence largely recovered in the quarters that followed but the overall picture remains gloomy. At the start of 2021, the confidence indicator stood at -6, i.e. 2 points down on the previous quarter.

Business confidence
JaarKwartaalBusiness confidence
2008Q4-7.0
2009Q1-24.3
2009Q2-29.7
2009Q3-23.5
2009Q4-13.5
2010Q1-7.1
2010Q20.5
2010Q33.4
2010Q46.1
2011Q17.2
2011Q210.1
2011Q33.2
2011Q4-4.4
2012Q1-6.3
2012Q2-6.8
2012Q3-8.6
2012Q4-9.2
2013Q1-10.7
2013Q2-11.7
2013Q3-8.7
2013Q4-2.7
2014Q11.6
2014Q24.7
2014Q32.9
2014Q44.9
2015Q15.6
2015Q25.4
2015Q38.7
2015Q47.4
2016Q19.3
2016Q28.8
2016Q37.9
2016Q49.2
2017Q114.7
2017Q215.5
2017Q315.9
2017Q413.4
2018Q118.1
2018Q214.2
2018Q315.0
2018Q413.4
2019Q110.6
2019Q212.0
2019Q310.6
2019Q46.6
2020Q16.4
2020Q2-37.2
2020Q3-19.3
2020Q4-4.0
2021Q1-6.0
Source: CBS, EIB, KVK, MKB-Nederland, VNO-NCW

Gap widening between sectors

The confidence gap between sectors is widening. In Q2 and Q3 2020, virtually all sectors were projecting a negative outlook. A more varied picture emerged at the end of 2020 with both positive and negative sentiments. This trend continued into the beginning of 2021; the mood improved in six different sectors. As a result, business confidence is positive in several sectors; construction stands out most prominently with the indicator at 12.1. On the other hand, some sectors are more pessimistic than in the previous quarter. This is mainly the case in accommodation and food services, where confidence fell most dramatically and entrepreneurs showed the most pessimistic outlook. A strong decline was also recorded in car trade and repair and in retail trade.

Business confidence by sector
 Q1 2021Q4 2020
Non-financial private sector-6.0-4.0
Construction12.15.4
Real estate activities3.42.7
Transportation and storage2.9-4.8
Information and communication2.2-4.5
Manufacturing0.6-5.6
Wholesale and commission trade01.3
Business services-3.3-0.6
Retail trade (excl. cars)-10.41.7
Mining and quarrying-16.3-17.1
Car trade and repair-20.5-6.9
Accommodation and food services-57.1-27.4
Source: CBS, EIB, KVK, MKB-Nederland, VNO-NCW

Red figures for many entrepreneurs in accommodation and food services and in culture, sports and recreation

This quarter, the Netherlands Business Survey contained an additional question about the operating result for 2020. Approximately 18 percent of businesses said they are closing 2020 with a loss. Sixty-two percent are expecting a positive result. The remaining businesses expect no significant profit or loss, or are unable to make a reliable estimate.

Operating result, 2020
 Negative (% of companies)No significant profit or loss (% of companies)Positive (% of companies)Do not know (% of companies)
Non-financial private sector18.411.462.27.9
Accommodation and food services69.77.313.99.0
Culture, sports and recreation55.720.712.511.1
Mining and quarrying39.021.537.32.2
Other services33.817.434.814.0
Transportation and storage32.36.952.68.1
Manufacturing17.010.864.97.3
Rental and other business services16.68.967.76.9
Trade13.713.863.39.3
Specialised business services10.915.964.88.5
Agriculture, forestry and fishing9.412.469.19.0
Real estate activities8.711.572.57.2
Information and communication7.913.365.213.6
Construction6.48.582.42.6
Source: CBS, EIB, KVK, MKB-Nederland, VNO-NCW

Business continuity concerns in accommodation and food services increasing

At the start of 2021, approximately 15 percent of the entrepreneurs estimated that the coronavirus situation may not last longer than eleven months, in order to guarantee business continuity. Two percent say two months is the maximum period. These estimates are more or less the same as those at the end of 2020. However, there are wide differences between the sectors.

Expectations towards business survival in the face of a persistent coronavirus situation
Bedrijfstakken/branches (SBI 2008)Maximum of 2 months (% of companies)3 to 5 months (% of companies)6 to 11 months (% of companies)12 months or more (% of companies)Impossible to say (% of companies)
Non-financial private sector2.15.77.164.121.1
Accommodation and food services14.526.39.831.418.0
Other services5.913.26.750.623.6
Culture, sports and recreation2.512.816.137.631.0
Agriculture, forestry and fishing2.34.05.561.826.3
Trade2.12.94.067.823.2
Specialised business services1.53.88.362.923.6
Construction1.06.810.774.66.8
Rental and other business services1.05.15.464.623.9
Manufacturing1.04.38.061.824.9
Transportation and storage0.63.77.165.822.7
Mining and quarrying0.04.52.069.923.5
Information and communication0.02.55.866.824.9
Real estate activities0.04.30.880.514.3
Source: CBS, EIB, KVK, MKB-Nederland, VNO-NCW

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