Netherlands: Conditions in manufacturing sector improve at stronger clip in January
The NEVI manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, rose to 60.1 in January from December’s one-year low of 58.7. As such, the index moved further above the neutral 50-threshold that separates an improvement from a deterioration in business conditions.
The headline improvement came on the back of stronger increases in output, new orders and exports, with the rise in output attributed to firming demand and greater capacity. However, while employment increased robustly in January, it was insufficient to prevent a further increase in outstanding work, partly due to material shortages. That said, work backlogs rose at the weakest pace since December 2020. Turning to prices, input price inflation continued to rise sharply in the month amid higher prices for transport, labor, energy and raw materials. Consequently, output prices also rose markedly.
Albert Jan Swart, manufacturing sector economist at ABN AMRO Bank, added:
“It seems that supply delays are easing, which is helping output and employment. […] Still, staff shortages might limit output growth. During the coming months, Omicron might lead to increased sick leave, which would make staff shortages worse.”