Netherlands: PMI hits multi-year high in November
This is the best reading since December 2013. The PMI thus rose above the 50-threshold that separates expansion from contraction in business conditions.
November’s result mainly reflected stronger growth in output, new orders and employment. Production and new orders continued to expand, with the former increasing at the fastest pace in nearly one year and a half.
On the external front, new export orders also increased at a strong pace, fueled in part by increased demand from the UK. Employment continued to rise robustly and the rate of growth in manufacturers’ purchasing of inputs accelerated to the steepest pace in almost three years.
Regarding price developments, input prices grew on the back of higher prices for raw material and manufacturers reacted by raising output prices.
Alex Gill, economist at IHS Markit, commented on November’s result, saying that, “the Dutch manufacturing sector continued to strengthen in November, buoyed by the sharpest rate of growth in client demand in almost a year-and-a-half […]. On a less positive note, the rate of input cost inflation outstripped that of increasing output prices, and was therefore indicative of a squeeze on profit margins.”
FocusEconomics Consensus Forecast panelists see fixed investment rising 5.8% in 2016, which is unchanged from the previous month’s estimate.
For 2017, the panel expects fixed investment to increase 3.2%, which is down 0.1 percentage points from last month’s projection. ■