Netherlands: Manufacturing PMI recovers some lost ground in January
February 3, 2020
Operating conditions in the Dutch manufacturing sector deteriorated slightly at the start of the year, with the NEVI Manufacturing Purchasing Managers’ Index (PMI) rising to 49.9 in January from 48.3 in December, which had marked an over six-year low. January’s figure came in below the 50-threshold, however, signaling worsening operating conditions in the Dutch manufacturing sector.
The print mainly reflected weak demand dynamics dragging on order books and output. Production dropped for the fourth month running, albeit it a softer rate compared to the prior month, while order books shrunk at the softest rate in three-months. This was also influenced by a marginal drop in foreign demand for Dutch goods. Weakness in demand, furthermore, led to the eleventh consecutive fall in outstanding work. More positively, headcounts at goods-producers rose in January while business confidence reached its highest level since November 2018, buttressed by optimism regarding demand conditions and plans to enter into new markets.
Looking at prices, manufacturers recorded higher input costs due to higher raw material prices and wages. As a consequence, output prices rose as the costs were passed on to customers.
Author: Jan Lammersen, Economist