Netherlands: Consumer confidence drops at the steepest pace in over seven years in January
January 22, 2019
The new year started on a sour note, with consumer confidence freefalling from 9 in December to 1 in January. Sentiment dropped for the sixth consecutive month and reached its lowest level since February 2015. The result came on the back of a broad-based deterioration in sentiment, but the index remained nonetheless above the crucial zero-point mark separating optimism from pessimism among Dutch households. The print also remained above the long-term average of minus 3 over the last 20 year.
The biggest drop in confidence in over seven years reflected a sharp fall in consumers’ views on the economic climate and less willingness to buy. Although the outlook on the economic climate remained positive due to still-rosy views on the economy in the past year, consumers’ views on the economy in the year ahead turned strongly pessimistic. This could be linked to the ongoing Brexit related uncertainty and lingering global trade tensions. Moreover, this indicates that private consumption could take a hit in the early stages of the year: Consumers’ willingness to buy fell into negative territory in January on pessimistic views on their financial situation. Consumers are pessimistic regarding their financial situation both in the last 12 months and the next 12 months. Nonetheless, consumers still viewed the current situation to be suited to purchase big-ticket items.
Netherlands Private Consumption Forecast
FocusEconomics Consensus Forecast panelists see private consumption expanding 1.9% in 2019, which is unchanged from last month’s estimate. In 2020, the panel expects private consumption to grow 1.8%.
Author: Jan Lammersen, Economist