Netherlands: Manufacturing PMI remains in optimistic territory in January
February 1, 2017
The NEVI Manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit and NEVI, dipped from 57.3 in December to 56.5 in January. The PMI nonetheless remained firmly above the 50-point threshold that separates expansion from contraction in the manufacturing sector.
January’s result reflected strong growth in output, new orders and employment, with output and new orders increasing at a somewhat more moderate, but overall robust, pace. Manufacturers benefited from both strong domestic demand and expanding export orders, which pushed manufacturers to increase their purchasing activity for the fifth month in a row and to contract more staff. Regarding price developments, input prices grew at the fastest pace in almost six years, mainly due to higher oil and steel prices; consequently, manufacturers reacted by raising output prices at the fastest pace in five-and-a-half years.
Alex Gill, Economist at IHS Markit, commented: “going forward, signs of a strengthening euro against the US dollar may provide some respite to companies importing dollar-denominated inputs. However, the subsequent downward pressure on client demand as Dutch goods become more expensive to foreign clients, combined with another potential rise in oil prices amid OPEC’s supply cut, could result in a further slowdown in the sector’s overall growth rate in the months ahead.”