Entrepreneurs trust lowest ever measured

Because of the corona crisis and the accompanying measures, entrepreneurs have not been so pessimistic since the start of the measurement. Entrepreneur confidence stood at -37.2 compared to 6.4 in the previous quarter. This is the strongest decline ever measured and is still well below the low point of the financial crisis. Confidence is lowest in the hospitality sector. Expectations for the next three months are negative in all industries, but there are large differences between them. This is reported by Statistics Netherlands (CBS), the Chamber of Commerce (KVK), the Economic Institute for the Construction Industry (Economische Instituut voor de Bouw), MKB-Nederland (MKB-Nederland) and the Confederation of Netherlands Industry and Employers (VNO-NCW) on the basis of the Netherlands Economic Survey. The data for this survey were collected in April 2020, before the relaxation of the measures announced on 6 May.

Business confidence is the voting indicator for non-financial businesses with at least 5 employees. At the beginning of 2018, business confidence reached its highest value (18.1). Subsequently, a gradually declining trend began up to and including the first quarter of 2020, after which, due to the corona crisis, confidence in the second quarter shows the largest decline since the start of the measurement at the end of 2008. The mood indicator is at its lowest level ever measured in the second quarter of 2020 (-37.2). This is even lower than when the financial crisis troughed in 2009. For the first time since the fourth quarter of 2013, negative voting prevails.

Entrepreneurs pessimistic about prospects

Entrepreneurs gave their expectations for nine economic indicators in April compared to three months previously. For each of these indicators, there are more entrepreneurs who expect a negative development than entrepreneurs who expect a positive development. In the same quarter last year, each of these indicators showed a positive balance. Entrepreneurs are mainly negative about the economic climate. Nearly 69 percent of business owners expect the economic climate to deteriorate in the next three months, while only 3 percent expect an improvement.

Of all indicators, expectations about turnover declined most relative to twelve months previously. The balance of turnover declined from nearly 28 percent in the second quarter of 2019 to more than -54 percent in the second quarter of 2020. Turnover expectations in the sector hotels and restaurants are the most negative of all sectors. Nearly 90 percent of entrepreneurs in the sector hotels and restaurants anticipate a lower turnover in the current quarter than in the preceding three months.

Entrepreneurs also gave their opinion on their investment expectations for 2020. More than 44 percent of entrepreneurs expect a decrease in fixed capital formation in 2020 relative to 2019. 7.4 percent expect an increase.

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