Activity in Dutch industry has grown at the strongest rate since January 2019 in November. In particular, the number of new orders increased considerably, especially from abroad. This also led to an increase in the number of jobs for the first time since February, reported the Dutch Association of Purchasing Managers (Nevi).
Orders from other countries have been growing for four months in a row. According to the Nevi, the increase in the number of jobs was modest. In particular, producers of capital goods, which are used to produce goods and services, recruited additional people. The work was mostly carried out by temporary forces. The amount of unfinished or unfinished work continued to decrease, but this decrease was the smallest in eight months.
The Nevi’s Purchasing Manager Index, which measures activity, stood at 54.4 as against 50.4 in October. If this gauge is above 50, there is growth, below it is shrinking.
“Entrepreneurs see clear light at the end of the tunnel,” says Albert Jan Swart, sector economist at ABN AMRO in a reaction. “The sudden build-up of confidence in the economy is probably the result of the news about coronavaccins. Despite the partial lockdowns announced by a number of European countries at the end of October, the new export orders have increased further.”
According to Swart, demand also increased considerably within the Netherlands, especially for capital goods. “It seems that some of the entrepreneurs are continuing investments that they had delayed due to the pandemic now after the good news about vaccines, resulting in more demand for machinery.”
The Dutch industry also benefited from the strong growth of German industry. According to the Nevi, the German recovery is partly due to a sustained export to China, where industrial production is steadily growing. Germany in turn imports many industrial products from the Netherlands.
In the short term, the Brexit also provides additional activity, the Nevi expects. Some companies purchase additional stocks due to the end of the transitional period at the end of this year. The exact nature of the trade relationship between the British and the European Union next year is still unclear. However, for each major Brexit deadline, many industrial companies were generally hammered for extra stock.