The industry saw the largest increase in turnover since the beginning of 2023. But entrepreneurs are pessimistic because staying profitable is difficult. Moreover, things are not going equally well everywhere. Food manufacturers are doing better than transport equipment manufacturers.
Turnover in the industry was 2.9 percent higher in the first quarter of this year than in the same period last year, according to new figures from Statistics Netherlands (CBS) shown in the table below.
“The high turnover increase is positive,” says chief economist Peter Hein van Mulligen. “But it’s not all roses.”
For thirteen consecutive quarters, the majority of entrepreneurs have said that profitability is deteriorating. “The pessimists are still in the majority,” says Van Mulligen. Fewer entrepreneurs also expect their turnover to increase.
Many developments are plaguing the industry. There is insufficient demand for products, there are too few means of production, there is a lack of material and space, and there are too few employees. “The staff shortage is still the biggest obstacle to business operations,” says Van Mulligen. “For one in three companies, this is the most important problem.”
The industry is of great importance to the Netherlands. It employs 800,000 people and the sector accounts for about 10 percent of the total economy. But nowhere else in the country do so many companies go bankrupt. In the first quarter, the number of bankruptcies increased by 5 to 84.
Larger contraction last year
Turnover of the Dutch industry increased mainly abroad, while it remained the same at home. According to Van Mulligen, it is difficult to say exactly what that is due to, but turnover abroad has been much worse in the past two years. “A larger growth now is a reaction to a larger contraction last year. It is not a clear change in the trend.”
Within the industry, the food and beverage industry was the largest gainer with no less than 8.1 percent. “This industry is also very focused on foreign countries. Producers in the Netherlands not only make jars of peanut butter for Dutch supermarkets, but also a lot of dairy that goes abroad.”
The transport equipment industry is the largest decliner with 11.6 percent. Here they are still suffering from the fact that a large factory was closed at the beginning of last year. Van Mulligen expects that the effect of that closure will probably decrease from the second quarter.