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Dutch Manufacturing Sector Expansion Slows As Covid-19 Hurt Demand

The Netherlands manufacturing sector expanded at a softer pace in March as demand weakened amid the coronavirus of Covid-19 impact, survey results from IHS Markit showed on Wednesday.

The NEVI manufacturing purchasing managers' index, or PMI, fell to 50.5 in March from 52.9 in February. Any reading above 50 indicates expansion in the sector.

Production reduced in March amid the quickest decline in incoming new business for over eight years. Output and order books declined, to weak client demand stemming from the COVID-19.

New export business decreased in March with the rate of decline the quickest since September 2011.

The number of workers decreased in March due to the non-replacement of leavers and termination of temporary staff.

Inventories of finished goods declined sharply at the fastest pace in five years in March, while stocks of purchased inputs rose marginally. The decline in the post-production inventories was among the quickest seen in the past five years.

On the price front, cost burdens increased further in March, extending the current sequence of expenses rising to four months. Selling prices rose further. The overall rate of charge inflation was marginal.

Confidence among the goods-producers regarding the next year outlook for output weakened to the lowest since July 2012. The concerns about the COVID-19 widespread had weighed heavily on expectations, but producers remain modestly optimistic.

"Although not as badly impacted by the pandemic as some of Europe, latest data paints a worrying picture for the Dutch manufacturing sector, with the pandemic still likely to further dampen confidence, demand and as a result, growth," Lewis Cooper, economist at IHS Markit, said.

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