Mood among Dutch business leaders darkens ahead of Brexit

19 December 2018 5 min. read

A new study among leaders in the Netherlands has found that an air of pessimism has descended upon Dutch executives in the last twelve months. Geopolitical uncertainties arising from the culmination of Brexit in 2019 and the tumultuous Presidency of Donald Trump are anticipated by many business leaders to have a knock-on effect on the economy of the Netherlands in the coming year.

Confidence among Dutch businesses was positively buoyant at the end of 2017. 91% of the businesses surveyed that year said they were optimistic about prospects for the Dutch economy over the coming 12-24 months. In comparison, this percentage stood at 80% in the surveys conducted the previous two years.

Just one year on however and expectations seem to have come back down to earth with a bump. According to the latest annual survey of Dutch business leaders by Eden McCallum, 69% of Dutch businesses remain optimistic to some degree, with 53% somewhat optimistic, and 16% very optimistic about the nation’s domestic prospects. While this still shows a majority looks at the economy favourably, it represents a fall of more than 20% from last year’s extraordinary optimism. Pessimism is meanwhile at its highest level since before 2015.Dutch economic outlook 2015 - 2018The survey took in the opinions of business leaders in the Netherlands, of which 75% held the roles of Chairman, CEO / Managing Director, Board Director, divisional Director, Vice President / Partner or Head of function. While the outlook remains rosy for Dutch dealings, the results showed that when it comes to a European or global outlook, they are significantly more pessimistic. Just 39% are optimistic about the Eurozone’s economic prospects for the coming two years, while only 3% were very optimistic, 35% were pessimistic, up from only 7% a year ago. At the same time, on a global basis, 34% were pessimistic, up from 7% this time last year, with 40% optimistic.

Commenting on the findings, Heleen Wachters, a Partner at Eden McCallum in the Netherlands, said, “No-one in Europe will be immune from the consequences of Brexit and uncertainty in the Eurozone and beyond. Worries over the Italian budget are clearly adding to nervousness over the Eurozone’s prospects. Dutch business has maintained healthy optimism so far, but it seems the mood is changing.”

Next crisis looming?

The worries are further highlighted by the sentiment around whether there will be a next crisis. Of those surveyed, 74% of Dutch respondents said a Eurozone crisis is likely to occur in the next five years (as opposed to 55% last year), while 70% rate the likelihood of a new global financial crisis as likely.Economic outlook for Netherlands, Eurozone and global

Trump & Brexit

With Britain a major trading partner of the Netherlands, Brexit is one of the largest concerns on the minds of Dutch executives. More than a third, or 36% of respondents, are holding off from making some investments until they see what the impact of Brexit will be. 39% think Brexit will be bad for their business, while 75% expect it to be bad for the Dutch economy.

Brexit is the main reason why the Dutch are still relatively upbeat when compared to their British counterparts meanwhile. In the same survey conducted among business leaders in the UK, only 12% of respondents were of any degree optimistic about their domestic economy. 27% of respondents are very pessimistic (up from 17% this time last year), while 83% think that leaving the EU will be bad for Britain. 38% are holding back on investment in the UK, and another 61% are finding it harder to recruit non-UK European talent.Impact of Brexit on companyAsked about how Netherlands-based leaders are working around Brexit, 47% of Dutch respondents said they are carrying on with business as usual and not worrying about Brexit. However, there are challenges too. More than one third admitted that they are holding off some UK investments to see what sort of Brexit deal is agreed, and one fifth said they are redirecting some UK investment to EU countries. Also, due to change in procedures, especially around mobility of people and trade of products/services, 20% admitted that planning for Brexit is consuming a significant amount of our organisation’s management time.

Elsewhere, 67% of respondents now feel that the impact of Donald Trump on the Dutch economy will be bad or very bad, up from 55% last year and 44% in 2016. 89% think he will be bad for the global economy, with the prospect of trade wars with the EU and China involving the US having escalated drastically under his administration.

Related: Dutch economy needs some fixes for competitiveness, warns AmCham.