Dutch economy shows more signs of contraction, but prospects are improving

Business and procurement activity during the last month of 2024 continued to show signs of contraction within the Dutch economy, but there were some signs of stabilization, according to Nevi, the Dutch association for procurement management. Overall demand remained lackluster, prompting businesses to purposefully keep supplies at lower levels.

It was the sixth consecutive month of economic contraction, according to the association’s observations. “The Dutch manufacturing sector ended the year in decline, with continued declines in new orders, production volume, and employment,” Nevi wrote.

Workforces have been reduced for five straight months, purchasing remained low, production was more limited, and delivery times remained longer, Nevi said. At the same time, purchasing prices have continued to rise, with inflation at its highest level in four months.

Nevi’s Purchasing Manager Index (PMI) stood at 48.6 in December, where any score below 50.0 suggests economic contraction compared to the previous month. The PMI is a measure to determine economic growth or contraction based on a survey of managers in supply chain positions across industrial sectors.

“As in November, the amount of purchased materials and the stock of materials decreased significantly this month. Meanwhile, sales price inflation remained high and barely changed this month, while the pressure on costs even increased slightly due to raw material and personnel costs,” Nevi wrote in a statement.

The score in December was less negative than the 46.6 reported in November, which had been the lowest score recorded this year. A year ago, the December PMI figure was pegged at 44.8. In fact, December 2024 showed the best PMI score since the end of July, suggesting a reason to be optimistic regarding the 2025 economic picture.

Nevi’s survey cited “confidence in future production volumes,” saying procurement and supply chain managers were the most upbeat they have been since July, even despite weak demand from foreign clients, including those in Germany. “This optimism was based on planned investments, companies’ growth ambitions, and a predicted increase in the number of new orders.”