Netherlands: Consumer confidence falls into pessimistic territory for the first time since February 2015
Sentiment among Dutch consumers continued to drop and stumbled into pessimistic territory in February with the index decreasing to minus 2 from plus 1 in January. This marked the seventh consecutive month in which confidence fell as well as the first negative reading in four years. Although the print remained above the long-term average of minus 3 over the last 20 years, the turn to pessimism came on the back of a broad-based deterioration in the underlying components.
Consumers’ views on the economic climate became less rosy while their willingness to buy dropped further. Their outlook on the economy worsened as consumers view the economic situation in the past 12 months and the next 12 months less favorably. Simultaneously, a corrosion in consumers’ judgement of their financial situations decreased their willingness to buy. Consumers also viewed the current climate to be less suited to purchase big-ticket items compared to the prior month. Views regarding the financial situation in the next 12 months remained unchanged in pessimistic territory.
Private consumption grew robustly in the fourth quarter over the previous quarter with household expenditure picking up pace in the quarter. However, the pace of growth in private consumption eased throughout the quarter and the latest consumer confidence data suggests that private consumption is set for a strong moderation in the first quarter of this year; in January and February, the index is averaging significantly below the reading of the fourth quarter.