Further increase in business activity for Dutch manufacturing sector
The Nevi Dutch Manufacturing PMI rose further in July, from 51.2 to 51.9, in part reflecting a further increase in activity.
Both production and new orders increased, as did employment and the purchase of materials. Many entrepreneurs are seeing an increase in incoming new orders, both from the Netherlands and abroad. The overall volume new orders rose at the fastest pace in more than a year.
The Nevi Dutch Manufacturing PMI has risen in recent months, possibly thanks to recovery in the semiconductor industry, but is now still slightly lower than the long-term average.
Whether this cautious recovery will continue in the coming months remains to be seen. At the time of writing, it is still unclear what the exact content is of the agreement that US President Donald Trump concluded with Commission President Ursula von der Leyen on Sunday 27 July.
What is certain is that the additional American tariffs on European cars will be reduced from 25 to 15 percent. That in itself is good news, although the tariffs are about six times higher than before President Trump introduced these import duties on cars in the spring. US tariffs on pharmaceuticals are likely to reach 15 percent. Until today, no additional tariff had been levied on pharma, an important export product for the Dutch manufacturing industry to the United States (US) market. Semiconductor production equipment, another important category for Dutch industry, might be exempt from tariffs.
The US has been charging an import duty of 50 percent on steel and aluminium since the beginning of June. This tariff might remain in place, which could negatively impact the European steel industry.
For the Dutch manufacturing sector, it is reassuring that trade tensions have not escalated further and that the European Commission is not retaliating with import tariffs on American products. European industry imports aircraft parts from the US, among other things. The coming months should show whether European exports to the US will come under further pressure. The US is an important export market for many products, including machinery, cars and pharmaceutical products.