Consumer confidence fell slightly in May, but business investments increase

Dutch consumers were slightly more pessimistic about the economy in May compared to a month earlier. It was the first time in six months that consumer confidence fell, according to the monthly monitor from Statistics Netherlands (CBS). They also showed a slightly more negative attitude towards making new purchases. At the same time, the most recent data on business investments showed an increase of over four percent.

Consumers were more pessimistic about the economy in May than in April, the CBS said. It was the first deterioration in consumer confidence figures after six straight months of improvements. The indicator used by Statistics Netherlands to measure consumer confidence reached minus-38 in May. The figure was at minus-37 in April.

In the Netherlands, consumer confidence is still exceptionally low and well below the average of minus-10 recorded over the past two decades. In September and October 2022, the lowest level ever figure was recorded by the statistics office, when the figure hit minus-59. Statistics Netherlands started this form of monitoring in 1986. Consumer confidence reached an all-time high in January 2000, when the indicator hit plus-36.

In particular, consumer opinions about the economy in the coming 12 months were more negative than a month earlier, the CBS said on Monday. Opinions about the financial situation in both the past 12 months and the next 12 months, were slightly less negative in May.

The willingness of consumers to make purchases was also slightly less negative. Specifically, there was a minor improvement in attitude towards making larger purchases.

Company investments more than 4 percent higher in March

Companies invested 4.4 percent more in March compared to the same month a year earlier. More money was invested in buildings and passenger cars in particular, the CBS said.

The extent to which companies were willing to invest has to do with the situation in the sales markets. The performance on the financial markets also influences the willingness to invest, according to the statistics office. The figures have not yet been corrected for working days, but March of this year had the same number of working days as last year.

Entrepreneurs in the Netherlands did say that the conditions for investing were slightly improved in April compared to March, but conditions were still unfavorable, the CBS said. The reason for the minor improvement is mainly because the year-on-year growth of exports was higher.