Dutch manufacturing remained under pressure in May 2025, with a Nevi PMI® of 49.0, slightly lower than April's 49.2. This figure indicates a further, albeit limited, deterioration in business conditions. The PMI combines indicators such as new orders, production volume, employment, delivery times and inventory levels.
Although production rose slightly, especially in the consumer and investment goods subsectors, demand remained weak. The number of new orders fell for the tenth time in 11 months. Customers remained reluctant to order, partly due to the uncertain economic environment. Foreign demand also declined slightly. The slight increase in production allowed companies to clear backlogs, but only to a limited extent.
The continued decline in unfinished work led to sharp contraction in employment, the biggest drop since December 2023. Companies reduced their workforce through reorganisations and cost-cutting. Procurement also remained cautious, with purchased materials declining for the twelfth consecutive month, mainly due to weak sales. Companies also deliberately kept inventory levels low.
Delivery times improve slightly
A positive effect of lower demand was that suppliers were under less pressure. Average delivery times improved slightly for the first time in a year. Cost pressures also eased further, with purchase price inflation falling for the third month in a row and reaching its lowest level in 2025 so far. Price increases were mainly driven by wage costs and prices for energy, raw materials and food. At the same time, producers kept their selling prices relatively stable, with the lowest selling price inflation this year.
Optimistic about the future
Despite the current challenges, manufacturers remain optimistic about the future. For the next 12 months, they expect an increase in production, partly thanks to the expected arrival of new customers and orders. Optimism rose from last month, although it remains historically modest.
Albert Jan Swart, industry sector economist at ABN AMRO, noted that the decline in new orders was not too bad given the high level of uncertainty. US importers are still paying significant import duties on many Dutch industrial products, despite cuts by the US. However, there is hope that trade tensions between the US and Europe will ease after the NATO summit at the end of June in The Hague. European member states are expected to invest more in defence, possibly partly in US weapons systems, which could reduce the EU trade surplus with the US often criticised by President Trump.
