Dutch manufacturing activity contracted further in February. According to data from the Dutch Association of Purchasing Managers (Nevi), the number of orders has decreased for the seventh consecutive month. Industrial companies still appear to be phasing out excess inventories of materials and semi-finished products that have built up during the coronavirus pandemic.
The Nevi’s so-called Purchasing Managers’ Index fell to 48.7 last month, from 49.6 in January. A level of 50 or more indicates growth, below that contraction. The gauge fell below 50 for the first time in two years in September, implying a contraction in industrial activity. It is not the same as industrial production. It still increased last month, albeit less than in January. Employment also continued to grow, albeit at its slowest pace in 28 months.
Commenting on the figures, ABN AMRO sector economist Albert Jan Swart indicates that Dutch industry is having a quack winter. “Despite the recent drop in gas prices, they’re still about three times as low as they were two years ago,” he says. ‘As a result, it is still difficult for European industry, which depends mainly on natural gas, to compete with coal-intensive factories in China and India, for example. Because the prices of other energy sources such as coal have also decreased”.
Swart points out that gas consumption by Dutch industry is not yet on the rise, despite the fact that European wholesale natural gas prices have fallen to pre-Russian invasion levels in Ukraine. “So it looks like heavy industry is still severely limiting production.”
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.
