Netherlands: Manufacturing conditions improve in August
September 3, 2018
Midway through the third quarter, operating conditions in the Dutch manufacturing sector improved as the NEVI manufacturing Purchasing Managers’ Index (PMI), co-produced with IHS Markit, increased to 59.1 in August from 58.0 in July. As a result, the PMI remained above the crucial 50-point threshold that separates expansion from contraction in the manufacturing sector, where it has been since July 2013, and above the survey’s long-run average of 52.6.
Business conditions improved on the back of sharp rises in output, new orders, new export orders, purchasing and employment growth. Particularly, output increased for the 64th consecutive month, a survey record, while new orders expanded for the 30th month in a row. However, although payrolls continued to increase in August, the pace of expansion eased to the softest increase in a year. This is likely linked to a near-decade low unemployment rate, which stood at 3.8% in July.
In terms of prices, inflationary pressures remained evident in August. Higher input prices came on the heels of a general shortage of goods—with still-strong supply chain pressures as suppliers’ delivery times lengthened significantly—and dry weather conditions affecting the agricultural sector. As a result, output prices rose markedly. Looking ahead, firms remained optimistic about expected business conditions due to robust growth in Europe and around the globe.
Netherlands Fixed Investment Forecast
FocusEconomics Consensus Forecast panelists see fixed investment rising 5.2% in 2018, which is down 0.3 percentage points from last month’s forecast. For 2019, the panel expects fixed investment to increase 3.4%.
Author: Jan Lammersen, Economist