The recovery of the Dutch industry continues. Both production and the number of new orders are rising sharply, as indicated by the Nevi Purchasing Managers' Index, which improved from 51.3 to 52.5 over May. When the index is above 50, it indicates an increase in industrial activity.
The sub-indicator for production made a significant leap, from 52.8 to 55.1, thereby indicating a strong increase in production. The sub-indicator for new orders also improved, from 53.7 to 55.3.
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A negative factor within the Nevi Purchasing Managers' Index is the still decreasing delivery times, indicating excess inventories. Due to the ample availability of many components and materials, delivery times are short, which indicates weak demand. However, it seems that the reduction of excess inventories is now almost complete. The sub-indicator for the amount of material purchased came out exactly at 50.0, indicating that purchasing managers are not buying less than in the previous month, on balance. Given the rapid growth of production, it is quite possible that more material will need to be purchased soon, which would further promote the recovery of, for example, the demand for semi-finished products.
Thus, the figures on industrial production are positive across the board, but it must be remembered that the increase is based on a relatively low level, as production has declined in 2023 and also in the first quarter of 2024. The low point seems to be behind us now. In many other countries, the industry is still performing moderately and on average below the level of the Dutch.
Source: ABN Amro
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