Despite material shortages, high energy prices, a scarcity of raw materials and a tight labor market, the production of Dutch industry in April was higher than ever measured. Compared to the previous year, factories produced on average 13.7 percent more. That growth is almost twice as high as in March, according to figures from on Friday the Central Bureau of Statistics (CBS)†
Worldwide demand is especially high for products manufactured in the Netherlands from the machine industry, where production in April was more than 64 percent higher than in 2021. More metal products, electronic appliances and foodstuffs will also be produced this year. “In recent months, the world economy has experienced spectacular growth and Dutch industry is benefiting from this,” said chief economist Peter Heijn van Mulligen of the statistical office.
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The exceptionally high production of the machine industry raised the average for the entire industry. Because surprisingly enough, a large part of the factories also started to produce less than last year. For example, the production of means of transport declined slightly. According to Van Mulligen, the transport sector suffers even more from a shortage of raw materials compared to other industries. For example, there is a scarcity of electronic chips and the war in Ukraine has had an impact on the steel and aluminum market, where prices fluctuate and products are not or hardly available.
Pandemic
In the corona pandemic, factories had to significantly reduce their production. “World trade came to a complete standstill,” says the researcher. “As a result, the supply of semi-finished products and other important parts, for example, also stopped.” Factories were also unable to run at full capacity due to infections among the staff.
“But after the pandemic, the companies caught up and the demand for machines manufactured in the Netherlands rose sharply,” said Van Mulligen. The machine industry exports many products abroad — Germany is an important sales market. According to the economist, many parts produced in the Netherlands also go to China and the United States.
Job market
At the European level, Dutch industry is lagging behind competing countries such as the United Kingdom and Belgium, despite a labor market characterized by enormous shortages. Statistics Netherlands recently found that there are about 133 vacancies for every 100 unemployed. Although many vacancies are also open in industry due to the high demand for technically skilled workers, production in many places does not suffer as a result.
“The industry has become more automated in recent years. A shortage of hands is easier to deal with there than in healthcare or education,” says Van Mulligen. “Still, I think these companies would achieve even higher production at full capacity.” The economist expects that if the labor shortage continues, factories will focus even more on automation.
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