Industry grows again after six months of contraction

Dutch industry is climbing out of the valley again after months of declining production. For the first time since the coronavirus outbreak, the NEVI purchasing managers index rose to 52.3 in August. A value above 50 indicates growth. The easing of lockdowns in several European countries and the upward trend in German industry in particular are stimulating industrial production.

Company purchasing managers are the first to identify whether industrial production is growing or shrinking and gear their purchases of raw materials, parts and production to this. In August, there were many new export orders, rising purchase and sales prices and increased purchasing activity.

The low point of the crisis may have passed, but caution is still required, says David Kemps of ABN Amro. “The crisis is not over yet.” Demand is still low and industrial production is still at a lower level than before the corona crisis.

For the time being, companies are busy reducing their workforce. “A large proportion of industrial entrepreneurs see that this corona crisis will have a long-term negative effect on their activities and turnover,” says Kemp. “The expectation is that the many reorganisations initiated later this year will lead to rising unemployment, lower production, falling investments and fewer innovations”