‘Production and demand for industry declined fastest in more than two years’ | Economy

This is the conclusion of the Dutch Association of Purchasing Managers (Nevi), which reviews activity in the sector every month.

According to the data, October saw the largest drop in production since June 2020. The number of new orders also decreased the most since May of that year. Not only from the Netherlands themselves, but also from abroad have recently received fewer orders and orders from industrial companies. This is largely due to high energy prices. There is also great uncertainty about the economic outlook. Both companies and consumers therefore pay more attention to their expenses.

“Demand for industrial products is now declining faster than when the Internet bubble burst in 2001,” says Albert Jan Swart, an industrial economist at ABN AMRO, in an explanation of the data. “Since the inception of the Nevi Purchasing Managers Index in 2000, the number of new orders has decreased even more rapidly in 2009, during the credit crisis and during the freeze at the beginning of the corona pandemic.”

Swart indicates that the picture has changed considerably since the period following the first lockdowns for the crown. At the time, the economy was undergoing a strong recovery and the shortage of parts and capacity was the main problem. It’s different now. “With the demand for industrial products rapidly declining, the shortage of materials is disappearing like snow in the sun and entrepreneurs have started to reduce stocks.”

Nevi’s overall operating conditions indicator fell to 47.9 from 49.0 in September. This means a noticeable deterioration. But Swart notes that the decline in the purchasing managers’ index appears to be slowing. According to him, this could mean that the bottom could soon be reached. He also points out that industrial employment continued to grow in October. He calls it “a clear sign of trust”.