Industry: never before such large shortages of materials | Financial

“In addition to chips, there are also shortages of basic materials such as wood and plastics,” says sector economist Albert Jan Swart of ABN Amro in an explanation. Supply problems have worsened in the past month, he said. A new corona outbreak in Shenzhen, an industrial city in southern China, forced the government to implement local quarantine measures, disrupting the port of Yantian. This port is the second largest in China. Many companies tried to move cargo through other ports, causing further congestion.

Higher prices

Due to scarcity and long delivery times, purchase prices are rising rapidly. Entrepreneurs try to pass on these costs in the selling prices in order to maintain their own margin. But there are also positive developments. According to Nevi, the number of new orders last month showed the strongest growth ever. A month earlier, there was also record growth. This advance is probably related to the relaxation of the corona measures. Also, some companies tried to build up additional inventories to cope with the ongoing disruption of supply chains.

The Nevi’s purchasing managers’ index, which measures activity, stood at 68.8 in June. That means a small drop compared to a month earlier. But it is still the second highest position ever. Swart says this still indicates very rapid growth. “Despite the longest delivery times and largest material shortages ever measured, Dutch industry still manages to increase production,” he notes.

strong question

Although some sectors are not yet using full capacity, such as the car industry, according to Swart, the production of the Dutch industry as a whole appears to be back to the level it was before corona. “Strong demand will allow industrial production to increase further this year and next, although material shortages could hold back growth in the short term.”

–