A river under the bridge in the Netherlands

Netherlands PMI September 2020

Netherlands: Manufacturing PMI hits seven-month high in September

Operating conditions in the manufacturing sector improved for the second straight month in September, with the NEVI manufacturing Purchasing Managers’ Index (PMI) rising to 52.5 from 52.3 in August, marking the best result since March. As such, the headline reading moved further above the neutral 50-threshold mark that separates an overall increase from decrease compared to the prior month.

September’s upturn was chiefly driven by a rise in factory output, which increased at the fastest pace in nearly two years amid firming demand conditions. New orders also increased, albeit at a softer pace compared to the previous month. Despite this, employment was cut for the seventh consecutive month, with the rate of job-shedding picking up from August. On the price front, input prices rose in September due to higher prices for raw materials and supply shortages. Meanwhile, output charges rose only modestly from August. Lastly, although sentiment among manufacturers deteriorated slightly from the previous month, it remained positive overall amid hopes of improved sales and a swift economic recovery.

Commenting on the result, Albert Jan Swart, manufacturing sector economist at ABN AMRO, commented:

“The Netherlands is currently facing a much-feared ‘second wave’ of coronavirus infections. We expect that the consequences for the Dutch manufacturing sector will be minor compared to those of the first wave. During the first wave of the pandemic, automotive assembly plants in Germany and other European countries closed down because of a lack of key parts from Chinese suppliers, causing an unprecedented fall of export orders for Dutch firms. Now that China seems to have the epidemic situation under control and European firms have the right procedures in place to prevent infection among workers, we expect that factories will be able to continue to operate during the second wave, although the pandemic still poses serious risks to demand and availability of workers.”

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