Key insights
- Dutch manufacturers are experiencing heightened inflationary pressures due to Middle East supply chain disruptions, leading to increased input and selling prices. Vendor performance has deteriorated, especially for Asian goods. While new orders and production volumes have increased, employment declined slightly, and confidence in the 12-month outlook has weakened due to geopolitical concerns. This could signal broader European economic headwinds, indirectly impacting US equities.
Investing.com -- Dutch manufacturers reported their strongest inflationary pressures in over three years during March, according to the Nevi Netherlands Manufacturing PMI released Wednesday. The sector’s headline PMI rose to 52.0 from 50.8 in February, marking its highest reading in six months.
Input price inflation jumped to a 41-month high in March, with manufacturers reporting increased costs for metals, plastic, fuel, energy and wages. The intensification of cost pressures was linked to supply chain disruption caused by war in the Middle East. Selling price inflation also reached its strongest level in over three years as firms raised output charges to protect margins.
Dutch manufacturers experienced their most marked deterioration in vendor performance in over three-and-a-half years, with delivery times lengthening particularly for goods from Asia. The disruption prompted some firms to attempt building buffer stocks, though overall inventory levels remained largely unchanged from February.
New orders grew for the first time in the opening quarter, supported by greater export sales. The increase was marginal and partly reflected responses to supply chain uncertainty. Production volumes expanded at their most pronounced rate since November, with growth widespread across all three monitored sub-sectors.
Employment declined modestly in March as firms opted against replacing staff leavers and renewing temporary contracts. This marked the first round of job losses in four months. Confidence in the 12-month outlook slipped below the historical average, with concerns around the geopolitical climate weighing on expectations.
Albert Jan Swart, Manufacturing Sector Economist at ABN AMRO, said the survey of approximately 350 purchasing managers took place from March 12 to 23. He noted that some Dutch companies are benefiting from supply chain disruption, with purchasing managers from Thailand, Singapore, China and Australia placing orders with Dutch suppliers.
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