Netherlands: PMI moderates from record-high level
April 5, 2018
The NEVI manufacturing Purchasing Managers’ Index (PMI), co-produced with IHS Markit, decreased to 61.5 in March from 63.4 in February. The result reflected a broad-based moderation, as four of the five variables grew at a slower pace in March. Despite coming down from February’s record high, the PMI remained well above the crucial 50-point mark that separates expansion from contraction in the manufacturing sector, where it has been since July 2013. Moreover, this suggests that the momentum in the economy seen last year has yet to fade.
Although the PMI dropped to a five-month low, output grew robustly in March and was underpinned by solid inflows of new orders. New export business rose at the softest pace in 10 months, however. Because of the ongoing expansion in the manufacturing sector, employment continued to grow in March at a strong pace. Suppliers’ delivery times increased to a new record level, despite a moderation in purchasing activity among manufacturers. Looking at prices, inflationary pressures remained resilient at the close of the first quarter as input price inflation remained marked, leading to strong output price inflationary pressures.
Trevor Balchin, Director of Economic Indices at IHS Markit, commented:
“The Dutch manufacturing sector finally took its foot off the accelerator in March as the PMI corrected to a five-month low […] That said, the latest figure of 61.5 was still the fifth-highest in over 18 years of data collection.”
Netherlands Fixed Investment Forecast
FocusEconomics Consensus Forecast panelists see fixed investment rising 4.5% in 2018, which is up 0.5 percentage points from last month’s forecast. For 2019, the panel expects fixed investment to increase 3.0%.
Author: Jan Lammersen, Economist