Netherlands: PMI drops to a six-month low in April
May 1, 2018
The NEVI manufacturing Purchasing Managers’ Index (PMI), co-produced with IHS Markit, decreased from 61.5 in March to 60.7 in April, the lowest reading in six months. However, the PMI remained elevated and came in above the crucial 50-point mark that separates expansion from contraction in the Dutch manufacturing sector. It has remained in expansionary territory since July 2013.
The PMI dropped on the back of easing growth in new orders, new export orders, output and employment. New orders rose for the 26th consecutive month, but at a slower pace. Growth in new export orders fell to an 18-month low. Subsequently, growth in output moderated to a nine-month low. Following softer growth in new business, employment growth moderated, although it remained strong. However, backlogs of work rose at a quicker pace and for a ninth consecutive month, which marked the longest streak in 11 years. Pressure on the supply chain remained, with suppliers’ delivery times increasing at a rapid pace. Looking at prices, while input price inflation eased to a seven-month low, it remained elevated and was passed on to consumers as output prices rose at a quick pace.
Trevor Balchin, Director at IHS Markit, commented:
“The Dutch manufacturing sector posted another strong overall improvement in business conditions in April, although evidence mounted that the current record upturn in the sector may have peaked.”
Netherlands Fixed Investment Forecast
FocusEconomics Consensus Forecast panelists see fixed investment rising 3.9% in 2018, which is down 0.4 percentage points from last month’s forecast. For 2019, the panel expects fixed investment to increase 3.1%.
Author: Jan Lammersen, Economist