Dutch industry has already shown a contraction in production for the third consecutive month. In March, the manufacturing industry even produced four percent less than the previous year. The blows fall mainly in the chemical and rubber and plastics sectors, and that is bad news according to ABN Amro sector economist Albert Jan Swart.
According to Swart, the sector is under particular pressure due to rising interest rates and flattening economic growth. For 2023, he therefore assumes a three percent decline in industrial production compared to 2022. “We already see in the first quarter that production is actually around three percent lower.”
“In the first quarter we see production down by three percent”
And so there’s legitimate cause for concern, Swart says. He points out that Dutch industry accounts for twelve percent of Dutch GDP, “and we see that the chemical industry and machine builders in particular are under pressure,” he continues. “There is less demand for cars, and this is for innovative companies like ASML, which provide a lot of economic dynamism, innovation and high-quality employment.”
Declaration
The reason production has been down for consecutive months is partly due to the chemical industry, Swart says. This sector is the most affected by high energy prices. While the price of gas has fallen significantly since its peak in August, it is still about three times higher than it was a few years ago. “It’s still dealing with the Russian invasion of Ukraine,” he says. “And that makes it difficult for heavy industry, including the chemical industry, to compete in the world market.”
The rubber and plastics sector produced no less than 9.5 percent less than a year earlier, according to director Harold de Graaf of the Federation of the Dutch Rubber and Plastics Industry. An effect of the supply chain disruption, he thinks. ‘Take horticulture as an example. Last January, members heard of a tomato grower who produces only 10%,’ says De Graaf. “So you don’t need to make pots or trays for it, and you don’t need to package it to be sold.” You can see this effect along the whole chain.’
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.
