Nevi: manufacturing production and demand decline most in over two years
Production of and demand for industrial goods in Dutch manufacturing last month saw the sharpest decline since the early stages of the corona crisis. This concludes the Dutch Association of Purchasing Managers (Nevi), which conducts monthly surveys of activity in the sector. According to the figures, October saw the biggest drop in production since June 2020. The number of new orders also fell to its lowest level since May that year. Not only in the Netherlands, but orders from abroad and orders from industrial companies have also declined recently. This is mainly due to high energy prices. The economic outlook is also subject to great uncertainty. Therefore, both companies and consumers are paying special attention to their spending.
“Demand for manufacturers is falling faster today than in 2001 when the internet bubble burst,” explains Albert Jan Swart, industry economist at ABN AMRO. “Since the publication of the Nevi Purchasing Managers’ Index in 2000, the decline was only faster during the crisis in 2009 and during the lockdown at the start of the corona pandemic.” Swart notes that the situation has changed considerably since the first coronal shockdown. Back then, the economy was thriving and shortages of parts and capacity were the biggest problems. Now the situation is completely different. “While demand for manufactured products is plummeting, material shortages are disappearing like snow and entrepreneurs are starting to reduce their inventories.”
Nevi’s overall operational health index fell to 47.9 from 49.0 in September. In other words, it is a significant deterioration. However, Swart said that the decline in the PMI seems to be slowing down. According to him, this could mean that the bottom could be near. He also stressed that manufacturing employment continued to grow in October. He called this a “clear sign of confidence”.