Netherlands: Manufacturing PMI reaches survey high in the first month of 2018
The NEVI manufacturing Purchasing Managers’ Index (PMI), co-produced with IHS Markit, came in at 62.5 points in January, the highest level in the history of the survey, and fractionally above the prior month’s level of 62.2. Hence, the PMI remained firmly anchored above the 50-point mark that separates expansion from contraction in the manufacturing sector.
The result was underpinned by strong growth rates in output, new orders and exports, while job creation grew at the quickest rate in the survey’s history for the fourth consecutive month. Both domestic and foreign demand grew at the fourth-quickest pace of expansion since the survey began in March 2000. While output growth remained solid, it moderated to a three-month low in January. Due to the ongoing improvements in the manufacturing sector, firms continued to expand their payrolls, with employment growing at the fastest rate on record.
Subsequently, the rise in backlogs of work eased. However, as demand continued to grow rapidly, supply delivery times increased at a strong rate due to raw material shortages. This led to marked price pressures; input prices grew at the quickest rate in more than six years. Output prices grew at a nearly seven-year high, and output expectations reached a new high in January on the back of an improved global economic outlook and planned investment in new products and capacity.
Trevor Balchin, Director of Economic Indices at IHS Markit, commented: “Dutch manufacturers hit the ground running at the start of 2018, with the PMI rising for the seventh time in eight months to a new record high. […] Looking ahead, Dutch manufacturers were at their most optimistic regarding future output […] since the question was first added to the survey five-and-a-half years ago.”