manufacturing turnover falls for third year in a row because of low oil prices

According to figures released today by Statistics Netherlands, manufacturing turnover in the Netherlands fell slightly in 2014: by 0.5 percent. This is the third consecutive year that manufacturing turnover has decreased. One of the causes of the decrease was lower selling prices of products in oil-related sectors of manufacturing. Domestic turnover reached its lowest point since 2010 in the fourth quarter, with a decrease of just over 7.5 percent. Turnover abroad remained reasonably stable in 2014.

Cheap oil pushes down turnover

The decrease in turnover is especially noticeable in sectors using petroleum as a main raw material. The knock-on effect of the substantially lower oil prices caused a sharp fall in turnover in the petrochemical industry in the second half of the year. In the fourth quarter, turnover in this sector was 18 percent lower than in the fourth quarter of 2013. The petrochemical industry accounts for around one third of manufacturing turnover.

In a number of sectors, exports kept turnover stable. In the transport equipment sector, for example, turnover increased throughout the year. In the fourth quarter it reached its highest level for ten years, with a growth of over 11 percent. This increase in turnover is mainly the result of increasing exports of cars and ships. Turnover in timber products industry grew for the same reason: domestic turnover fell slightly in 2014, as a result of the slump in construction, while turnover abroad continued to grow steadily.

Manufacturers positive

In spite of the decrease in turnover, which has now lasted for three years, Dutch manufacturers are optimistic about 2015. The confidence indicator is still positive, although it fell in January 2015 from 3.4 to 2.8. This slight fall in January is the result of a less positive outlook in terms of future production. The trend in producers’ confidence has been positive since October 2012.