Netherlands: Manufacturing sector conditions improve at a softer pace in June
The NEVI Manufacturing Purchasing Managers’ Index (PMI), produced by S&P Global, eased to 55.9 in June from 57.8 in May, reaching a 19-month low. However, the index remained above the neutral 50-threshold that separates improving from deteriorating business conditions compared to the prior month.
The moderation came on the back of softer growth in output— partly due to raw material and staff shortages—and new orders, which increased at the softest pace in 20 months. High inflation warded off some sales, while muted demand from European peers, Russia and China weighed on export orders. Continued supply chain snarls and fears of a further deterioration in supply drove record growth of purchases of finished goods, as firms attempted to build safety buffers. Regarding prices, input price inflation eased for the second consecutive month, but remained above the long-run average. Higher prices for raw materials and energy drove up input costs. As a consequence, output prices were raised at one of the fastest rates on record, in an attempt to protect profit margins. More positively, employment rose further in June, despite increasing at a softer pace from the prior month, while firm’s output expectations for the 12 months ahead rose to a four-month high.