Mass layoffs at Philips and Aldel, unemployment is rising again for the first time in two years, the confidence of producers and consumers is sinking: what many are already feeling in their wallets is now also reflected in the official figures.

“I think we have passed the tipping point and are in a mild recession that we don’t really know if it will develop into a deep recession,” said ING Chief Economist Marieke Blom in news hour.

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It comes to this conclusion because a number of economic indicators are in the red. “The first thing we do is look at what consumers are doing,” says Blom. ING does this by looking at the debit card transactions of people who have an account with the bank. This gives a picture of how total consumer spending is developing in the Netherlands.

“We see consumer spending soaring in the second quarter after being in lockdown in the first quarter,” says Blom. “The second quarter was a very good quarter. But in the third quarter we see that consumer spending is a bit lower again.”

ING can only see how many euros people are spending, not how much they are buying. The latter are of particular interest to economists. Because everything has become more expensive, that number will have fallen even more than the roughly 1.5 percent drop in the chart.

That still sounds like a relatively modest decline. “But we economists usually fall off our chairs at a 1% change in a quarter,” says Blom. “For us, this means a significant change in the economic environment.”

company

Of course, what consumers do also has an impact on companies. To be able to say something about this, ING looks at the trust of the producers. “We do this by asking companies how many orders they’ve received in the last few months,” says Blom. “We saw from the companies that responded that there was a recovery after Corona.”

During this period, the line on the chart rises above 50. “As soon as it falls below 50, that means companies have said, ‘We have fewer orders now than in the previous period,'” says Blom. Most recently, producer confidence fell to 43 in September. “If we look a little deeper into the data, we see that the companies that are struggling are mainly manufacturing companies that require a lot of energy.”

trust

Another reason why Blom speaks of a recession is that consumer confidence has fallen. “It’s really at an all-time low now, it’s never been that low. The question is: are you willing to buy or sell something? People are now saying: I can’t afford that because everything is getting more expensive.” And my income is not increasing accordingly.”

The fact that Blom is only talking about a slight recession has to do with the fact that things are going well. “For example, employment is still at a high level. But the future is very uncertain: it has to do with things like what kind of winter we’re going to have and whether gas will get even more expensive.”

full stock

The changed economic situation is already clearly noticeable in the port of Rotterdam. The warehouses are full because of the collapse in demand. “It’s full, there’s no more pallet space,” says Cuno Vat, CEO of Neele-Vat Logistics, as he walks through one of his large warehouses in the port of Rotterdam. “That makes it difficult to help new customers.”

The building was completed in June, but to his surprise, it’s already packed. “The same goes for our other warehouses, they are all running at full capacity now.”

“Full warehouses are also good news somewhere,” says economist Rens van Tilburg. He is director of the Sustainable Finance Lab, a scientific think tank that focuses on more sustainable use of public finances. “For a long time, it was difficult to get the products you were looking for, and as a result, prices have risen. Now it can work the other way around: people want to sell things, which can cause prices to go down.”

react to the situation

A “little bit of recession” might not be such a bad thing because of the huge labor shortage, says Van Tilburg. “So in itself it is okay if the economy cools down a bit. What we have to prevent is that the recession becomes too long and too deep.”

According to him, this danger exists when key players in the economy, such as central banks and governments, do not react appropriately to the situation. “If they don’t see that prices are already falling on their own and keep raising interest rates or cutting spending, then this recession could get worse and hurt a lot.”

Cuno Vat, CEO of logistics service provider Neele-Vat, has already found that finding staff is easier. “Up until the summer we had major problems finding staff in all areas, especially in the warehouse with forklift drivers and order pickers. We’ve been more successful in that lately.”