Netherlands: Manufacturing PMI falls in March
April 1, 2020
In March, the NEVI Manufacturing Purchasing Managers’ Index (PMI), produced by HIS Markit, fell to 50.5 from 52.9 in February. Consequently, the index remained above the neutral 50-point mark that indicates an overall improvement compared to the prior month, despite the Covid-19 pandemic.
The headline print was, however, somewhat flattered by lengthening supplier delivery times due to supply chain disruptions. The coronavirus, moreover, has had a notable impact on the sector as output, new orders, employment and output expectations all fell. New orders fell at the steepest rate in more than eight years amid weak demand dynamics, while new export orders declined at the joint-strongest pace since September 2011. Weakened demand dynamics translated into job shedding through termination of temporary contracts and non-replacement of staff that left. That said, the loss of employment was mild. Meanwhile, stocks of finished goods also dropped. Looking at prices, input prices rose due to supplier shortages and higher raw material costs. These costs were in part passed on to customers, with output prices rising, albeit marginally.
Commenting on the data, Lewis Cooper, economist at IHS Markit, noted: “Although not as badly impacted by the pandemic as some of Europe, latest data paints a worrying picture for the Dutch manufacturing sector, with the pandemic still likely to further dampen confidence, demand and as a result, growth.”
Author: Jan Lammersen, Economist