Dutch manufacturing sector improves despite weak export demand

Investing.com – According to data released on Monday by Nevi and S&P Global, Dutch manufacturing experienced modest growth in February, with the Purchasing Managers’ Index (PMI) rising from 50.1 in January to 50.8.

Production accelerated to a three-month high, though the pace of growth remains moderate by historical standards. Manufacturers reported handling existing orders and new projects, even as total new orders declined for the second consecutive month.

The latest order decline was small, mainly reflecting a further drop in international orders. Export sales fell at the fastest rate in nearly a year, although the overall contraction remained moderate.

Companies attributed the reduction in orders to weak global demand and insufficient investment.

Employment grew for the third consecutive month, but at a lower rate, marking the weakest growth during the current expansion. Manufacturers continued to steadily reduce backlogs.

Firms maintained a preference for low inventory levels, with both pre- and post-production stock decreasing. Purchases declined sharply, the strongest since June 2025, though still moderate.

Lower procurement levels did not fully ease supply chain pressures, as delays in input deliveries caused by stock shortages persisted.

Operating costs increased significantly, with inflation reaching its highest level in nearly a year. Companies reported rising raw material (including metals) prices and higher wage costs. Some costs were passed on to customers, with output prices rising at the fastest pace in 11 months.

Confidence in the outlook for the next 12 months improved noticeably, returning above the long-term trend. Manufacturers expressed optimism about stronger order backlogs, upcoming product launches, and marketing efforts.

Albert Jan Swart, an economist at ABN AMRO Bank specializing in manufacturing, stated that the eurozone manufacturing PMI preliminary reading rose to 50.8, the highest in nearly four years. He noted that about 43% of respondents expect growth this year.

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