A river under the bridge in the Netherlands

Netherlands PMI June 2021

Netherlands: Operating conditions continue improving at strong pace in June

The NEVI manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, inched down to 68.8 in June from 69.4 in May, which marked a series’ high. Nonetheless, the index moved further north of the neutral 50-threshold that separates optimism from pessimism among Dutch goods-producers.

At the close of the second quarter, output growth remained rapid amid a record-strong expansion in order books. This came on the back of the easing of restrictive measures. Foreign demand remained healthy for the same reason, despite export order growth slowing from the prior month. Purchasing activity remained elevated as firms attempted to build inventory buffers amid supply shortages and constraints—supplier delivery times lengthened to the greatest extent on record. Supply-side issues fueled price pressures in the month, with input costs inflation rising at a record-high pace. Firms raised their selling price in response.

Albert Jan Swart, manufacturing sector economist at ABN AMRO, commented:

“Supply chains continue to be severely disrupted. Apart from chips, many firms have to deal with shortages of even basic materials such as lumber and plastics. Supply chains were disrupted further in June due to delays in container shipping. A new outbreak of Covid-19 near the city of Shenzhen, a manufacturing powerhouse in southern China, prompted a new local lockdown which disrupted terminal operations in Yantian, the second-largest port of China. Firms tried to ship their cargo through other ports in the region, which led to widespread congestion of shipping. A large amount of cargo has been delayed by weeks and it might take months to get the vessels back on schedule. It seems that supply chains might be disrupted more often by quarantine measures until staff in the transportation sector has been fully vaccinated in all major economies.”

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