Netherlands: Manufacturing PMI falls into contractionary territory for the first time in over six years in November
December 2, 2019
For the first time since June 2013, operating conditions in the Dutch manufacturing sector deteriorated as the NEVI Manufacturing Purchasing Managers’ Index (PMI) fell to 49.6 in November from 50.3 in the prior month.
The contraction in the sector was driven by a drop in order book volumes, reduced output and softer job creation. New orders fell at the quickest rate in over six years, with both domestic and foreign demand dynamics continuing to be hamstrung by global uncertainties. Output fell for the second month running and at an accelerated pace as a consequence. More positively, however, headcounts grew again, albeit at a more subdued pace. On the back of weaker demand and ongoing job creation, backlogs of work declined for the ninth consecutive month. Meanwhile, input prices dropped again thanks to lower prices for raw materials. This in part led to the first moderation in output prices since September 2016.
Despite the gloomy headline, manufacturers maintained an upbeat view regarding output over the next 12 months, as goods producers still expect production to increase. However, Lewis Cooper, an economist at IHS Markit, the firm which compiles the survey, noted that “sentiment was subdued in the context of historical data.”
Author: Jan Lammersen, Economist