News Financial
Agricultural companies are postponing investments
Nearly 80% of agricultural businesses in the Netherlands experienced increased economic uncertainty last year. Domestic policies and regulations, as well as changes in the market or demand, are the most common reasons for this. This translates into higher costs and postponed investments. This is evident from Statistics Netherlands' Business Survey published today.
Domestic policies or regulations are cited by 40% as a cause of economic uncertainty; changes in demand or the market by 36%. Over a fifth also consider international politics responsible for a worsening economic climate. Inflation or interest rate developments are a reason for economic uncertainty for 13%. The availability and terms of credit/loans are a cause for concern for almost no one (1%).
Survey participants were allowed to name a maximum of two reasons. The survey was conducted in early July at companies employing five or more people. In agriculture, this represents a relatively small group (78% of companies employ one or two people, according to CBS figures). This does provide a glimpse into the concerns of agricultural entrepreneurs.
Three-quarters of all respondents are experiencing the effects of increased economic uncertainty. The main consequence for 57% is higher costs. 22% are experiencing lower revenue, and 14% feel less desire to expand. 8% are also experiencing delivery delays. Finally, over 3% are experiencing reduced access to financial resources.
Invest less and watch costs
Of the companies surveyed, 31% are not taking any specific measures. A third are investing less or postponing investments. More than a quarter are building a financial buffer and trying to control costs. 22% are increasing flexibility in personnel, production, or processes. 10% are trying to reduce their dependency by diversifying their suppliers, customers, or markets. A small group of 4% is maintaining more inventory of materials or merchandise.
Looking at all Dutch businesses, they experience less uncertainty on average than agricultural businesses (74%). Besides agriculture, industry also scores high. The automotive and business services sectors, at 65%, experience the least economic uncertainty.
Linda van Eekeres
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