Dutch manufacturing production growing reasonably fast
The cautious recovery of the Dutch manufacturing industry continues, although the growth rate of production slowed slightly in November, according to the Nevi Dutch Manufacturing PMI.
The Nevi Purchasing Managers’ Index of 51.8 is the same as last month. New orders continued to grow at almost the same pace.
The demand for capital goods in particular is increasing, according to the survey of approximately 350 purchasing managers. The demand for machines is growing, presumably because customers are still going ahead with their investment plans after earlier postponements. Many entrepreneurs postponed investment plans because of trade restrictions implemented by President Trump. Now that the effects of the trade tensions seem to be not too severe, the demand for machinery is increasing again, such as machines for the agricultural sector.
False start in chip market
The demand for machines for the chip industry is also growing. Still, some suppliers are in trouble. Due to the soft demand in the chip market in recent years, surplus stocks had arisen at many firms in ASML’s supply chain. Some suppliers, anticipating growing demand from ASML, have produced extra parts too early. This is especially troublesome when ASML is by far the largest customer of the company. Some suppliers are now reducing production significantly to reduce excess inventory. They are also cutting jobs, insourcing production and looking for new markets.
Nexperia effect is not too severe
The effect of the shortage of Nexperia chips does not seem to be too bad for the time being. It is true that delivery times have increased considerably, but the industry is used to something. In addition, the demand is not growing at a rapid pace, so the need for parts is not too high. More serious is the rise in costs facing industrial companies. Wages, material prices and energy are becoming more expensive, according to many respondents. For the second month in a row, employment declined slightly, partly due to an improvement in productivity. This higher labour productivity will be desperately needed if the industry starts to grow faster again in 2026, and the shortage of personnel increases again.