Netherlands: Manufacturing operating conditions deteriorate at sharper rate in April
The NEVI Manufacturing Purchasing Managers’ Index (PMI), produced by S&P Global, fell to 44.9 in April from 46.4 in March. As such, it remained below the neutral 50-threshold that separates deteriorating from improving business conditions compared to the prior month.
The steeper contraction in business conditions was driven by sharper drops in output and new orders. Lower demand pushed firms to reduce input buying, which led to the most pronounced depletion of stocks since May 2013, as well as a solid decline in inventories. As a result, backlogs of work fell at the steepest rate since the initial period of the Covid-19 pandemic. That said, employment continued to rise, albeit at a slower pace compared to the previous month as firms became more reluctant to replace voluntary leavers. Moreover, the 12-month outlook for output remained optimistic, albeit the degree of confidence was historically subdued, with some firms reportedly worried about the impact of interest rate hikes on sales. Turning to prices, in April, input prices fell for the second consecutive time and at the fastest rate in almost three years, while output inflation eased to a 30-month low.