In November, Dutch industry contracted for the first time in over a year and a half, Statistics Netherlands reported this morning. While the contraction appears to be small at 0.2%, there are big differences by sector. For example, production in the chemical sector stands out in a negative sense: it has decreased by more than 15 percent.
And therefore there is cause for concern, says Ingrid Thijssen, president of the employers’ organization VNO-NCW. This would be the production of basic raw materials, which are used for everything. “From plastic for your laptop to medicines,” she says. ‘And that production has largely stopped in the Netherlands, so we’ve seen it coming. But this is very worrying.’
Especially since a contraction in the sector can have serious consequences for all types of SMEs associated with it, suppliers or customers. “It’s also worrying and dangerous for the economic structure,” Thijssen continues. “For example, 25 percent of Limburg’s economy is tied to Chemelot, and that’s largely at a standstill.”
They need
According to Thijssen, the problems mainly concern raw materials which are needed for Holland and Europe, ‘and where we actually want to be independent. We learned this during the pandemic and now it’s becoming clear during the war. Now there is the risk that the industries will stop definitively and leave».
However, Thijssen points out that the shrinkage rate doesn’t apply to the entire industry. Half of the industry is still growing. “We came out of the pandemic very well and started,” he continues. ‘And everything is going very well in the manufacturing industry. But the problems are in the basic chemical industry. We are seriously concerned about this. Also because there is a risk that once such a factory shuts down and an alternative offer has emerged, there is a serious possibility that a factory will never start again. Especially now that the United States has introduced the Inflation Reduction Act».
Brussels
She calls it good news that Brussels wants to introduce the same kind of legislation to support European industry. “However, what is very important – and it is also what energy-intensive basic industry requires – is that sustainability is accelerated, just like making funds for sustainability more accessible,” says Thijssen. ‘What you see is that it’s been very easy in the US since January 1st. There you get a certain amount of subsidy for producing a certain amount of goods.’
However, the Netherlands does not want such a European law on reducing inflation and Thijssen is disappointed. But he doesn’t have a solid plan to get the Netherlands to that point. “There is still a lot of money in Europe, and if it were needed, we are definitely in favor of it”, he concludes. ‘But the most important thing for the Dutch basic industry is that sustainability is accelerating. Progress is being made with the import and production of hydrogen or with the construction of wind farms. Here’s what it is. And that where there are funds, it will be easier to use them.’
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
