Business confidence in the Netherlands continues to decline. For the thirteenth quarter in a row, entrepreneurs rate their outlook negatively. With a score of –5.4 in the first quarter of 2025, confidence has fallen further compared with –3.2 in the fourth quarter of 2024. This marks the first clear drop since late 2023. Notably, only one sector—the business services sector—still shows slightly positive sentiment. In almost every other sector, confidence slipped further, with the sharpest declines in agriculture, forestry and fishing, and in hospitality.
Negative business confidence in almost all sectors
The fact that business confidence is negative for the thirteenth consecutive quarter confirms a continuing trend of uncertainty and caution. Only the business services sector reports a mildly positive score. In two other sectors confidence improved; in industry it remained almost unchanged; but in eleven sectors sentiment worsened. In particular, agriculture, forestry and fishing, and hospitality remain stubbornly pessimistic.
Positive signals from Q4 2024
Although overall confidence fell in Q1 2025, results for Q4 2024 were net positive on several key points:
- Turnover and order intake: entrepreneurs were most positive about turnover and incoming orders. This suggests that, despite growing economic uncertainty, demand for products and services remained through the end of 2024.
- Profitability and competitive position: profitability and competitive position in the Dutch market were also assessed positively on balance.
- Staff levels neutral: on average, staff level expectations were neutral. However, at sector level there are clear differences between firms reporting staff shortages and those aiming to cut labor costs.
- Order book slightly negative: the order book is the only indicator rated slightly negative for Q4 2024. This may point to uncertainty about future contracts.
Expectations for Q1 2025
For the coming three months the picture is mixed:
- Positive expectations: entrepreneurs anticipate increases in selling prices, staff levels, investments, order intake, and purchase orders. This could mean companies plan to pass on rising costs and see opportunities for growth or innovation.
- Turnover outlook negative: despite positive sentiment on prices and orders, entrepreneurs remain net negative about their turnover in Q1 2025. This may indicate they expect more cautious customers and rising costs to squeeze margins.
- Profitability and investment in perspective: compared with a year ago, entrepreneurs are slightly less optimistic about profitability in the next three months. Nevertheless, they are more positive about their planned investments for the current year, suggesting a willingness to keep investing in innovation and capacity expansion.
Labor shortages remain the biggest constraint
Over 36 percent of entrepreneurs still cite labor shortages as the greatest challenge to the continuity and growth of their operations. It remains the most frequently mentioned obstacle, although in some sectors the shortage is slightly less acute than a year ago. Additionally, more than 10 percent of entrepreneurs report financial constraints. This is the highest share since January 2016 and may be linked to rising interest costs and uncertainty about future financing options.
The Dutch Business Cycle Survey for Q1 2025 shows entrepreneurs are worried about the overall economic outlook. Business confidence is in the red for the thirteenth quarter running, largely due to negative prospects in many industries. Yet the Q4 2024 figures still reflect recent growth in turnover, order intake, and profitability.
Looking ahead, entrepreneurs expect mostly higher selling prices, investments, and order volumes, but overall turnover remains a concern. At the same time, persistent labor shortages hamper growth, and financial challenges are mounting, causing some firms to adopt a more cautious stance. Despite ongoing uncertainty and negative sentiment on many fronts, the positive investment outlook indicates that entrepreneurs continue to seek new opportunities. The coming quarters will show whether this investment willingness is enough to turn the tide and restore confidence among businesses.
