Netherlands: PMI edges down in July, but remains elevated
The NEVI manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, inched down to 67.4 in July from 68.8 in June. Nonetheless, the index remained comfortably above the neutral 50-threshold that separates optimism from pessimism among Dutch goods-producers.
The downtick at the outset of the third quarter came on the back of a slight easing in output, new orders, exports and purchasing growth. New orders, as well as employment and stock of purchases, eased to three-month lows in the month; output softened to a four-month low, partly due to capacity constraints. As new orders grew at a stronger pace than output, backlogs of work rose strongly, and final goods inventories dropped sharply. Suppliers’ delivery times lengthened markedly in the month amid raw material shortages and shipping bottlenecks. Input prices rose at the strongest pace in record amid firming demand and supply shortages. As a result, output prices were raised notably.
Albert Jan Swart, manufacturing sector economist at ABN AMRO, commented:
“Since output has mostly recovered from the record slump in 2020, entrepreneurs not only struggle with supply chain disruption, but also with an old familiar bottleneck: labor shortage. […] Labor shortages are probably back at pre-pandemic levels. We expect that entrepreneurs will experience increasing difficulty to find sufficient staff.”