Netherlands: Consumer confidence falls in August
Consumer confidence came in at minus 40.0 in August, down from July’s minus 39.0. As a result, the index remained below the 0-threshold, indicating pessimism among consumers.
Consumers were slightly more pessimistic about the economy in the past 12 months, while their opinions about the economy in the next 12 months remained unchanged. That said, they were slightly less negative about their financial situations over the last 12 months. Their opinions about their financial situations over the next 12 months were unmoved. Meanwhile, consumers were more negative about their willingness to make large purchases.
Consumer sentiment should benefit from real wage growth turning positive again in July, decelerating inflation ahead and a still-tight labor market. That said, a deterioration in activity, coupled with high levels of private debt and further policy tightening from the ECB, will likely weigh on any optimism gains, especially when it comes to large purchases. Falling house prices are a key factor to watch; they declined 5.5% year on year in July, which was the sixth consecutive annual decline. On the one hand, lower prices will lead to a much-needed increase in affordability. On the other hand, they also reduce the net worth of existing homeowners.