VNO-NCW and MKB-Nederland asked managers of 325,000 companies how they see next year and the rest of this year. The outlook is bleak: only 8% expect the economic situation to improve, and more than 50% are bleak. “It is very low,” said Kasper Boetting, policy secretary of VNO-NCW and MKB-Nederland.

According to Boetting, 50% expect the economic climate to deteriorate. “The majority of sectors in the Netherlands are already negative at the moment, but things are getting worse.”

One of the reasons for this is the Corona crisis and the subsequent debt. Rising energy prices, labor costs and higher purchasing costs for businesses also play a role. Therefore, Boeing advises the Cabinet not to increase the burden on entrepreneurs. “I would be very cautious about that, because we also see in these numbers that margins are under strong pressure,” Boetting continues. They have been like this in recent years, but the pressure has increased. This will continue to evolve.

Profit is also under pressure

It is logical that the profits of companies and entrepreneurs are also under pressure and are declining. “This also applies to next year. What is worrying about this is that investments are also under pressure.

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Buiting says things haven’t really gone well since coronavirus. Then there was an investment gap of €20 billion, which is growing even larger thanks to all kinds of challenges. Digitization and sustainability, among other things, entail many costs for the business community. “How can this be financed?” Especially if you also want future financial growth?

Calculate

Of the companies surveyed, only 1% indicated that higher costs could be fully transferred. Boeing points out that this percentage is still low for a reason. “There are many reasons for this,” he says. “You often have to deal with long-term contracts with customers, which makes it difficult to pass on prices all at once. In addition, it is simply impossible to increase the price of some products – no one buys croissants for 7 euros. There is simply a limit to how much you can pass the prices.

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He asserts that although the percentage of firms that can move all of the higher costs is small, the percentage that can move most of the higher costs can move reasonably well. “But they are also dealing with margin loss,” he concludes. ‘Compared to three-quarters of entrepreneurs who can only partially afford the costs. This is where it hits when you look at earnings.