Netherlands: Business confidence rises in March, outlook darkens amid war in Ukraine
Business confidence rose from 8.5 in February to 8.7 in March. Consequently, the index remained comfortably above the neutral zero-threshold, indicating prevalent optimism among businesses.
March’s headline improvement came on the back of more upbeat views on stocks of finished goods. However, firms’ outlooks on business expectations and order books moderated. The war in Ukraine weighed heavily on sentiment as firms’ views on the general economic climate in the next three months turned negative for the first time since the pandemic started in 2020.
Nic Vrieselaar, senior economist at Rabobank, remarked:
“Low unemployment may encourage companies to invest so that they are less affected by staff shortages and can meet demand. On the other hand, the same labor shortages and problems in supply chains can inhibit the ability to actually consume and invest. Many products already have long delivery times. […] Moreover, the fear and economic uncertainty caused by the war and higher commodity prices, can significantly affect the willingness of individuals and companies to buy and invest.”