Netherlands: Business confidence tumbles to lowest level since March
July 3, 2011
The external sector continues to support the Dutch recovery, with May exports increasing 17.1% over the same month last year, which came in above the 12.0% expansion seen in April. Although a major share of exports corresponds to the so-called re-exports (imports, upon which little or no value is added), developments in the manufacturing sector confirm the notion of a rebound, as manufacturing output accelerated from a subdued 1.0% year-on-year expansion in April to a 2.6% increase in May. Imports picked up as well, increasing 13.7%, which marked a significant improvement compared to the 7.1% expansion tallied over the previous month. However, the print fell short of the 17.9% average growth observed in first quarter, pointing to a slower recovery on the domestic front. In the same vein, business confidence dropped for the fourth consecutive month in July, plummeting to minus 2.2 points, which marked the lowest level since March. Simultaneously, consumer sentiment inched down again, falling to its lowest level since December.