Manufacturing output almost 7 percent down in September

In September 2020, the average daily output generated by the Dutch manufacturing industry was 6.8 percent down on September 2019. After three months in which the year-on-year decrease became smaller and smaller, there was a larger drop in production again in September. For the first time after five months, confidence among manufacturers was more negative than in the previous month.

Average daily output manufacturing (volume)
jaarmaandchange (year-on-year % change)
2016October0
2016November3.4
2016December6.7
2017January0.4
2017February4.9
2017March3
2017April0.5
2017May5
2017June2.4
2017July2.7
2017August3.7
2017September4.8
2017October5.1
2017November5.3
2017December4.4
2018January7.5
2018February3.2
2018March3.8
2018April4.7
2018May2.9
2018June3.3
2018July0.9
2018August4
2018September1.7
2018October2.4
2018November1.3
2018December-4.3
2019January-0.6
2019February-0.1
2019March-0.8
2019April-0.3
2019May-0.9
2019June-2.5
2019July0
2019August-1.7
2019September1.2
2019Oktober0.5
2019November-1.6
2019December-1.2
2020January1.4
2020February-0.9
2020March-1.9
2020April-10.9
2020May-12.1
2020June-9.7
2020July-5
2020August-3.6
2020September-6.8

Output decline in majority of industries

In September, almost two-thirds of the industries again saw their output decline on an annual basis. Contraction was also larger in most of those industries compared to August. Of the eight largest industries within manufacturing, the repair and installation of machinery industry recorded the strongest output contraction. However, the important chemical industry recorded higher year-on-year production for the third month in a row.

Average daily output manufacturing (volume) by sector, September 2020
Categorychange (year-on-year % change)
Chemical products1.2
Food products0.1
Electrical and electronics-4.5
Rubber and plastic products-4.5
Metal products-6.3
Transport equipment-9.3
Machinery-19.6
Repair and installation of machinery-31.2
Manufacturing (total)-6.8
Altogether, the industries referred to in the above graph account for approximately 75 percent of the total manufacturing output

Downward trend

A more accurate picture of short-term output developments is obtained when figures are adjusted for seasonal effects and the working-day pattern. After adjustments, an increase of 1.0 percent is seen in manufacturing output between August and September. 

Adjusted for seasonal and working-day effects, manufacturing output is seen to fluctuate significantly. From mid-2014 until the beginning of 2018, the overall trend was upward. Subsequently, the trend has been downward.

Seasonally adjusted average daily output manufacturing (volume)
jaarmaandindex (2015=100)
2016October102.5
2016November105
2016December106.3
2017January103.1
2017February105.5
2017March105.2
2017April104.6
2017May106.6
2017June106.1
2017July106.1
2017August105.6
2017September107.3
2017October107.7
2017November109.7
2017December110.4
2018January110.5
2018February109.4
2018March109.4
2018April109.4
2018May109.6
2018June109.3
2018July107.6
2018August109.3
2018September109.1
2018October109.6
2018November110.2
2018December107
2019January109.6
2019February109.2
2019March108.8
2019April108.9
2019May108.5
2019June107.3
2019July107.5
2019August107.8
2019September109.5
2019October109.7
2019November108.4
2019December106.5
2020January109.8
2020February107.8
2020March106.5
2020April97.6
2020May96
2020June98.5
2020July102.2
2020August103.6
2020September102.6

Recovery of producer confidence is faltering in October

After five consecutive months in which confidence among Dutch manufacturers improved, confidence deteriorated slightly in October. Manufacturers were more negative about their future output. The industrial capacity utilisation rate stood at 79.2 percent at the start of Q4 2020. This was higher than the 76.9-percent rate at the start of Q3.

Germany is an important foreign market for the Dutch manufacturing industry. According to the Business Climate Index of the IFO Institute, producer confidence improved in October for the sixth consecutive month and was back in positive territory for the first time since June 2019. A great many more companies were satisfied with their current situation. However, recent optimism about the coming months has evaporated. In the past quarter, capacity utilisation increased considerably, from 75.3 points to 79.8 points. In September, the average daily output generated by the German industry contracted by almost 9 percent year-on-year, as reported by Destatis.The year-on-year decrease is smaller than in the previous six months.

The figures published in this news release are provisional and subject to revisions.

Sources

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