Netherlands: Manufacturing PMI drops to near two-year low in August
The NEVI Manufacturing Purchasing Managers’ Index (PMI), produced by S&P Global, eased to 52.6 in August from 54.5 in July, marking the lowest print since October 2020. However, the index remained above the neutral 50-threshold that separates improving from deteriorating business conditions compared to the prior month.
The headline moderation came on the back of the first drop in output and new business in just over two years. Demand dynamics weakened due to a lack of access to the Russian market, weak Chinese demand and rising caution among customers due to inflation. This also drove a large number of order postponements. New export orders fell particularly sharply. That said, lingering supply chain issues drove an expansion in purchasing activity. Looking at prices, input cost inflation moderated for the fourth month running, but output price inflation accelerated for the first time in four months.
David Kemps, sector banker at ABN AMRO, commented on a brighter outlook ahead:
“The 12-month forecast for manufacturing production remains positive. By offering significant added value and customer-specific solutions, manufacturing businesses are still managing to pass on the high costs of raw materials to their customers, and next year’s order books are still looking healthy.”