Netherlands: PMI improves in October on rising output
November 2, 2015
The NEVI Manufacturing Purchasing Managers’ Index (PMI), which is produced by Markit and NEVI, recovered in October after two months in decline. The PMI rose from 53.0 in September to 53.7 in October and, as a result, remains well above the 50-threshold that separates expansion from contraction in business conditions.
According to Markit Economics, October’s small rise mainly reflected that output growth picked up to a three-month high. In addition, the rate of job creation hit an over-four-year high and purchasing activity performed solidly, recording the 27th consecutive rise. However, new orders and new export orders both decelerated notably, recording the smallest expansion in over a year, and businesses continued to reduce their backlogs of work. Input costs continued to fall, mainly on the back of low oil and steel prices, while output charges registered a moderate increase.
According to the survey report, “although output growth accelerated in October, a further slowing of new orders suggests that the Dutch manufacturing sector’s expansion could start to wane by the end of the year unless demand picks up. Still, firms were sufficiently confident to increase staffing levels at the strongest rate in over four years. Lower prices for key commodities such as oil and steel led to a further drop in input costs, allowing manufacturers to boost their margins as output prices rose on the month.”