Netherlands: Consumer confidence decreases in May
Consumer confidence came in at minus 38.0 in May, down from April’s minus 37.0. As a result, the index remained below the 0-threshold, pointing to sustained pessimism among consumers.
The deterioration was broad-based. Consumers were more pessimistic about the economy in both the past 12 months and the next 12 months. That said, they were slightly less pessimistic about their financial situation over the past 12 months and over the next 12 months, as well as about their willingness to make large purchases.
Rising wages, the energy price cap, a tight labor market and lower average inflation should gradually reduce consumer pessimism in the coming months. That said, high levels of private debt coupled with further interest rate hikes from the ECB will cap consumer sentiment going forward. Falling house prices—they dipped 4% year on year in April—are a key factor to watch. On the one hand, the recent moderation in home prices bodes well for housing affordability, benefitting consumer sentiment. On the other hand, this dynamic is reducing the net wealth of homeowners, knocking consumer sentiment.