Consumers gloomy, but economy holds steady: ‘No reason for panic’

Figures from Statistics Netherlands (CBS) show that consumer confidence dropped from -30 in March to -44 in April, a notably steep decline. Dutch consumers are particularly pessimistic about their personal finances and consider it a bad time to make major purchases. Nevertheless, spending levels remain stable, according to analyses by ING. Robert Dur argues that this gap highlights the difference between how consumers feel and how they actually behave. ‘Consumer confidence can be a useful signal in very turbulent times, but it says far from everything about the state of the economy,’ he explains in a news article on the website of Dutch broadcaster NOS.

Gloom driven by news, not necessarily reality

Dur points out that pessimism is partly fueled by media coverage of economic uncertainties, such as rising fuel prices and the prospect of more expensive groceries. ‘That contributes to consumers becoming quite gloomy, even though they themselves may not be doing so badly.’ In other words, sentiment is negative, but the financial reality for many households is less severe than the mood suggests.

More saving, but spending continues

At the same time, households are choosing to save more. The savings rate has risen to around 17.5 per cent of income. According to Dur, this is a rational response to uncertainty, as people build a financial buffer for the future. ‘Consumers are choosing to put something aside for a rainy day,’ he says. ‘But this will not immediately lead to an economic crisis.’ This is also reflected in spending patterns: despite higher costs for essentials such as fuel, Dutch consumers continue to spend on items like clothing and dining out. Rising wages play a role here, leaving households with more to spend overall.

When does it become a real concern?

According to Dur, there will only be real cause for concern if the labour market deteriorates. ‘I will only start to worry if unemployment rises, and that is not the case at the moment.’ The conclusion is clear: although consumers feel more pessimistic, the economic impact remains limited for now. Confidence is low, but the resilience of households is keeping the economy afloat.