Dutch manufacturing sector struggling with decline in new orders

Domestic demand for both investment goods, including machinery, and semi-manufactured goods declined. The demand for consumer products did increase. Exports also picked up slightly, after a slight decline in December.

In addition, costs rose sharply, at the fastest pace in ten months. Respondents indicate that metals, plastics and other raw materials became more expensive. Transport costs and wage costs are also mentioned. Companies also increased their selling prices at a rapid pace, suggesting that they are trying to pass on cost increases. The survey was conducted before employers and trade unions reached an agreement on a new collective labor agreement for Metal and Technology on Tuesday 27 January. It has been agreed that wages will increase by around 3 percent for two years in a row, in March 2026 and in March 2027. The collective labor agreement applies to approximately 340,000 employees.

Not only the Dutch manufacturing sector is struggling with weak demand. For example the German manufacturing sector is also struggling with weak demand and excess capacity. The Germans are suffering from the import tariffs imposed by US President Trump, high energy costs for the chemical industry and cutthroat competition in the car industry. S&P Global's preliminary purchasing managers' index for German manufacturing did improve in January, from 47.0 to 48.7. The production of the German industry even seems to have risen slightly in January. Investments in infrastructure and defense should stimulate the growth of the German economy in the course of this year.

In the Netherlands, chip machine manufacturer ASML came with good news. Thanks to strong demand for AI chips, the demand for chip machines is increasing rapidly. In 2025, many Dutch suppliers were struggling with excess stock of parts, but given the sharply increasing demand for the advanced EUV machines, these suppliers should be able to benefit from ASML's growth in 2026. The electrical engineering industry and the metal products industry in particular supply parts for chip machines.

The coalition agreement that D66, VVD and CDA presented on Friday 30 January contains a number of improvements for the industry. The coalition wants to extend the SDE++ subsidy scheme until 2032 with a budget of 8 billion euros per year. The coalition also wants to allocate money for the Indirect Cost Compensation (IKC), which can benefit the energy-intensive industry in particular. The plans also include a budget to lower the electricity price for companies, but only from 2028. The new coalition also wants to largely reverse the cuts in education made by the Schoof cabinet. Because the coalition does not have a majority in both the House of Representatives and the Senate, it will have to gain support from other parties.

Demand for building materials is also expected to pick up this year, thanks to strong growth in residential construction. The steel industry and metalworkers, among others, can benefit from this growth.