Purchasing Managers' Index November
The NEVI PMI has been on a downward trend for the past few months. Each month we publish the NEVI PMI, which stands for NEVI Purchasing Managers’ Index, comparing various aspects of Dutch industry with other countries. Professor Arjan van Weele has commented on the latest figure (3 Dec 2018).
This week the Financieele Dagblad newspaper reported that the IFO score, a key measure of business confidence in Germany, had fallen to 98.7, below the threshold value of 100. This means that German businesses have become rather more pessimistic about their economic prospects. Does the same apply to the Netherlands? Should we be concerned about the prospects for our economy?
The NEVI Purchasing Managers’ Index indicates that we should expect to see a decline in economic growth. November’s NEVI PMI figure was 56.1 (compared with 57.1 in October). It is important to note that a NEVI PMI value above 50 indicates better conditions for industry than in the previous month. This key economic indicator has shown a downward trend for a few months. It’s certainly true that industrial growth is slowing down. Nevertheless, the prospects for the year ahead remain good. The explanation can be found in the full order pipeline (companies have plenty of work, including for the months ahead) and in the continuing high level of orders from the Netherlands and abroad (both the new order index and the new export order index are higher than the previous month).
Our country’s industrial sector has confidence in the short-term future, given the new products that are being brought onto the market, the good export opportunities and the investments that have been made in expanding capacity. If Dutch businesses have become more pessimistic about anything, it’s about long delivery times and poor delivery reliability for the materials that they need. Some companies indicate that the low water levels in our rivers are now having a clear negative impact on the supply of raw materials. The PMI of 56.1 puts the Netherlands in a favourable position vis-à-vis its neighbours. The figure for the eurozone was 52.0, for the United States it was 55.7 and for China it was 50.1. If I was grading a school report, I would give the Netherlands a B.