Industrial revenue down by over 5 percent in the first quarter

In the first quarter of 2024, the industrial revenue in the Netherlands experienced a 5.5 percent decline compared to the same period a year earlier. This marks the fourth consecutive quarter of declining industrial revenue. The decrease was more pronounced in foreign markets than in the domestic market, according to the latest data from the Dutch Central Bureau of Statistics (CBS). This article provides an in-depth analysis of this decline, its impact on various sectors, and the broader economic implications.

Industrial Revenue in the Netherlands: A Comprehensive Analysis

General Trends in Industrial Revenue

The Dutch industry has faced a continuous decline in revenue, with a 5.5 percent decrease in the first quarter of 2024 compared to the same quarter of the previous year. This marks the fourth consecutive quarter of revenue decline.

Domestic vs. Foreign Revenue

The revenue decline was more pronounced in export markets than in the domestic market. Foreign revenue decreased by 5.9 percent, while domestic revenue fell by 4.8 percent. This trend highlights the vulnerability of the Dutch industry to international economic fluctuations.

Sectoral Differences in Industrial Revenue

Electrical and Machinery Industry

One of the few sectors that saw an increase in revenue was the electrical and machinery industry, with a growth of 4.9 percent. This sector continues to benefit from the demand for advanced technology and industrial automation.

Textile, Clothing, and Leather Industry

The textile, clothing, and leather industry also saw a slight growth of 1.7 percent, possibly due to renewed interest in fashion and textile products post-pandemic.

Paper and Graphic Industry

The paper and graphic industry experienced marginal growth of 0.1 percent, despite challenges such as digitalization and rising raw material costs.

Metal Industry

The metal industry saw a revenue decline of 7.0 percent, indicating decreasing demand in both domestic and international markets.

Refineries and Chemical Industry

The refineries and chemical industry experienced an 8.0 percent revenue decline, likely due to fluctuating oil prices and increasing environmental regulations.

Food and Beverage Industry

The food and beverage industry saw a 9.3 percent decline in revenue, possibly due to changing consumer habits and rising costs of raw materials.

Transport Sector

The transport sector experienced a 10.0 percent decline, impacted by rising fuel costs and logistical challenges.

Wood and Building Materials Industry

The most significant decline was seen in the wood and building materials industry, with a decrease of 13.9 percent. This reflects the slowdown in the construction sector and the increasing costs of building materials.

Sales Prices and Profitability

Decrease in Sales Prices

Sales prices in the industry fell by 1.9 percent in the first quarter of 2024 compared to the same period a year earlier. Foreign sales prices fell more sharply than domestic prices, indicating global price pressures.

Sectoral Price Changes

The largest decreases in sales prices were seen in the paper and graphic industry, the metal industry, and the refineries and chemical industry, with declines of over 6 percent. Conversely, prices in the electrical and machinery industry increased by 4.2 percent.

Bankruptcies in the Industry

In the first quarter of 2024, 79 bankruptcies were registered in the industry, one less than in the same period a year earlier. Compared to the previous quarter, the number of bankruptcies increased by 25.

Profitability and Business Operations

Profitability in the industry remains under pressure, with more entrepreneurs reporting a deterioration rather than an improvement. On balance, 7.6 percent of producers indicated that profitability had worsened in the past quarter.

Main Obstacles for Entrepreneurs

Entrepreneurs cited a shortage of labor, insufficient demand, and a shortage of production materials, space, and/or resources as the main obstacles in their operations. Nonetheless, over 35 percent of entrepreneurs in the industry reported no obstacles.

Conclusion

The revenue decline in the Dutch industry in the first quarter of 2024 is concerning, especially given that this is the fourth consecutive quarter of decline. The differences between sectors highlight the diverse challenges and opportunities within the industry. While some sectors, such as the electrical and machinery industry, continue to grow, others, like the wood and building materials industry, are under significant pressure. The decline in sales prices and the ongoing challenges in profitability and business operations underscore the need for strategic adjustments and innovations within the industry.