Businesses more positive about profitability

© ANP / Peter Hilz
In the second quarter, entrepreneurs saw profitability improve on balance for the first time in over two years. In many industries, however, profitability continued to decline. Business confidence rose but still remains slightly negative, reaching -3.4 at the start of Q3 2024. 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), which was conducted in July.

After seasonal adjustment, slightly more businesses saw profitability improve in the second quarter. However, there are large differences between the various sectors. Business owners in the construction sector are the most positive, with nearly 12 percent indicating that profitability improved, on balance. In car trade and repair, the balance turned from positive (nearly 9 percent) to the most negative in any sector (over -8 percent). By contrast, in the transportation and storage sector the negative balance reversed to positive and this was also the largest increase in any sector.

Two in three businesses report positive first-half results

Nearly 65 percent of entrepreneurs ended the first half of 2024 with a profit. Over 11 percent made a loss and nearly 17 percent reported no significant profit or loss. The construction sector had the highest proportion of positive figures, at nearly 81 percent, followed by mining and quarrying, car trade and repair and wholesale trade. Operating results in culture, sports and recreation and in the retail trade were the least positive. In culture, sports and recreation, nearly 38 percent of businesses were profitable and 24 percent suffered losses.


Business confidence less negative once again

At the start of Q3 2024, business confidence rose slightly for the third consecutive quarter (+2.6). From the end of 2021 to the end of 2022, the sentiment indicator fell sharply to -22.2. Since then, it recovered gradually. Business confidence remains slightly above average (-4.0) for the series since 2012, however.

Sentiment remains negative in most sectors

Business confidence has risen in most sectors this quarter, but it remains negative overall. The highest relative increase in confidence was seen in the construction, wholesale trade and transportation and storage sectors, while the sentiment indicator fell the most in culture, sports and recreation and business services.

In mining and quarrying, entrepreneurs were most positive, followed by those in transportation and storage and information and communication. Business confidence is the lowest in agriculture, forestry and fisheries.

Sources

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