Dutch Manufacturing Sector Expands For First Time In 20 Months

Dutch manufacturing activity expanded for the first time in 20 months in April on improving demand, production and employment, survey results from S&P Global and ABN AMRO showed on Wednesday.

The Nevi manufacturing Purchasing Managers' Index rose to 51.3 in April from 49.7 in the previous month.

A score above 50.0 indicates expansion in the sector. The score signalled the first improvement in operating conditions since August 2022.

New orders grew for the second consecutive month in April and the pace of growth accelerated to a two-year high. Demand from abroad also strengthened in April.

In response to rising demand, factories ramped up production. Output grew the most in nearly two years.

However, purchasing activity continued to drop as firms deliberately tried to reduce input stock. There was improvement in vendor performance in April, reflecting reduced capacity pressure at suppliers.

Manufacturers increased staffing for the third consecutive month in order to support expansion plans.

At the same time, the volume of unfinished orders decreased again. The sustained fall in backlogs reflected a combination of increased efforts to work through outstanding orders and shorter delivery times for inputs.

Input prices increased in April following just over a year of falling prices. Higher input costs fed through to consumers as output charges climbed for a fourth consecutive month.

Business sentiment strengthened in April with firms expecting improvements in demand and the start of new projects to support output growth over the year ahead.

ABN AMRO Manufacturing Sector Economist Albert Jan Swart said the firm expects economic growth to slowly increase from this quarter, and that the ten-year interest rate will drop further from 2.9 percent currently to 2.1 percent at the end of the year.

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