Netherlands PMI - Lower order positions and more layoffs in the industry

High costs of personnel, energy, and raw materials, but especially the weak demand due to Trump's unpredictable policy with high import tariffs, or sometimes not, make manufacturers cautious with their purchasing and investment decisions. Despite the fact that industrial companies produced slightly more in March and April, purchasing managers expect fewer new orders for the next three months. This applies across the board: from chemicals to metals, from machinery to semiconductors. ASML, for example, reported a 20 percent lower inflow of new orders than analysts had expected on average when publishing its first-quarter figures.

A trade war between the US and China can lead to structural changes in global trade flows, with significant consequences for the Dutch industry. Although only 6 percent of the total Dutch export is destined for the US, a larger portion of the Dutch export to Germany ultimately ends up in products for the American market, such as cars and machinery. Therefore, ABN AMRO is revising its sector forecast for the industry down to 1 percent growth in 2025 (from 4 percent) and 4 percent in 2026. From 2026, the Dutch industry is expected to benefit from the planned large investments in European defence and German infrastructure.

The number of employees in Dutch factories declined for the ninth consecutive month. The pace of job losses was fastest in April since December 2023, mainly due to the reduction of temporary staff and not replacing departing employees. However, layoffs are expected to continue in the upcoming period. The public employment services agency UWV reports a sharp increase in the number of collective layoffs in the first quarter of 2025. The reasons for the layoffs are mainly cost control and reorganizations. This currently affects employees mainly at SMEs in the industry, but besides the closure of several large chemical factories in Rotterdam, Tata Steel Netherlands has also announced mass layoffs. These measures are largely due to high energy costs. However, at the time of writing, it was not yet known whether the proposed climate and energy package with half a billion euros in government support had been approved in the Spring Report. This would be a significant boost for the energy-intensive industries such as chemicals and steel to remain in the Netherlands.