According to the quick estimate, inflation in April was 5.2 percent. This quick estimate is calculated on the basis of still incomplete source data. In March, consumer goods and services were 4.4 percent more expensive than twelve months previously. The regular figures of the consumer price index (CPI) will be published on May 11. ‘The underlying figures are actually somewhat more positive.’
An inflation rate of 5.2 percent in April 2023 means that consumer product prices are 5.2 percent higher than in April 2022. The inflation rate of 5.2 percent in April is therefore not on top of the inflation rate of 4.4 percent in March. ‘For everyday life, it seems that inflation is falling,’ says chief economist Peter Hein van Mulligen. ‘You see that many food prices are still higher than last year. Overall, life is still quite a bit more expensive than a year ago.’
According to Van Mullligen, the biggest price increase we had for energy is over. ‘Last month the drop was very large, but that was mainly because energy prices exploded in March last year. So that’s why inflation may rise slightly, but that mainly has to do with what happened last year, less with what’s happening this year.’
Downward trend is weakening
So it seems that the downward trend is bouncing back a bit. ‘That’s not too bad, fortunately, the underlying figures are actually somewhat more positive. For example, if you look at the prices of groceries, for example food. That price increase has actually decreased. In March, food was more than 15 percent more expensive than one year previously, and now in April it has dropped to just over 13 percent.
‘The underlying figures are actually somewhat more positive’
‘The fact that inflation is still higher is because the fall in energy prices is somewhat smaller year-on-year. A smaller decrease is actually a larger increase,’ says Van Mulligen. “But it does mean that it is daily life, so the groceries, it seems that inflation is slowly falling.”
Business confidence
Entrepreneurs in the manufacturing industry were less positive in April. Producer confidence went from 4.0 in March to 3.0 in April, according to Statistics Netherlands. This is mainly because entrepreneurs were less positive about the order book and the expected activity.
‘Producer confidence has been a bit difficult to gauge in recent months, but confidence has actually held up reasonably well,’ says Van Mulligen. ‘In the months before, it rose a little bit every month. On balance, most entrepreneurs in the industry are still positive. The order position is a little less, but it’s not that they don’t like it at all anymore.’
Producer confidence is above the long-term average of 1.3. Business confidence reached its highest value in November 2021 (12.7). The lowest value (-28.7) was recorded in April 2020.
‘However, business confidence remains fairly stable’
“There are still a lot of uncertainties. You also notice in the industry that those high prices caused unrest last year. You see that especially in the energy-intensive sectors of industry – the chemical industry, the base metal industry, the petroleum processing industry. There the sentiment was all a bit less.’
Less positive about order position and expected activity
Entrepreneurs were less positive about the order book and the expected production in the next three months. Their assessment of stocks of finished products did not change.
Two sub-indicators of producer confidence were positive. The number of entrepreneurs who consider the order position large prevailed over the number of entrepreneurs who consider the order book too small, given the time of year. The number of entrepreneurs who expect their production to increase in the next three months was greater than the number of entrepreneurs who foresee a decrease in production.
However, a sub-indicator was negative. The number of entrepreneurs who regard their stocks of finished products as too small was smaller than the number who consider their stocks too large.
Producer confidence is falling in more than half of industrial business classes
In more than half of the major industrial sectors, producer confidence deteriorated in April. As in previous months, entrepreneurs in the electrical engineering and machinery industries were the most positive.
