Entrepreneurs in COVID-impacted sectors are pessimistic

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.

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.

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.

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.

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