Stagnating growth in new orders expected to trigger renewed production decline by the end of 2025

On the supply side, purchasing volumes were largelyDespite softer demand, operating costs rose at the fastest pace since August. Firms reported the direct impact of higher energy and labour costs. Suppliers faced similar pressures and raised their prices accordingly. Respondents also noted higher prices for various raw materials. Only the investment goods subsector recorded cost inflation; the other two subsectors reported cost declines.

Despite softer demand, operating costs rose at the fastest pace since August. Firms reported the direct impact of higher energy and labour costs. Suppliers faced similar pressures and raised their prices accordingly. Respondents also noted higher prices for various raw materials. Only the investment goods subsector recorded cost inflation; the other two subsectors reported cost declines.

Dutch manufacturers adopted a far more assertive pricing strategy in December, resulting in the strongest rise in output charges in four months. All three monitored subsectors reported higher selling prices, with the investment goods segment leading the increase.

As in every month since early 2023, the level of outstanding business fell again in December. Although firms had sufficient capacity to process their backlogs, they chose to expand their workforce for the first time in three months. While modest, this increase in employment was the strongest in ten months.

Business confidence in the Netherlands also rose to its highest level in ten months. Responses to the question about production expectations for 2026 showed that optimists outnumbered pessimists by six to one (44% versus 7%). This optimism was attributed to positive order expectations, the launch of new products and favourable growth forecasts.