Higher oil prices drive up Dutch industrial turnover

Dutch industrial output grew 8.4% in the second quarter, marking the largest year-on-year increase since late 2022, according to statistics from the national agency CBS. However, this surge was primarily fueled by soaring oil prices rather than a genuine economic revival, as reported by DutchNews. Across industries, oil prices surged by 5% compared to the previous year, indicating that more than half of the growth was due to the higher costs of goods rather than increased sales. In contrast, the manufacturing sector saw a 0.7% decrease in turnover last year.

The economic upturn was not uniform, with refineries and the chemical industry experiencing a 31.2% increase in output compared to a year ago, while the oil industry alone expanded by 83% due to higher selling prices, which rose by 40.5%. These significant gains in the oil sector can be attributed to disruptions in the Strait of Hormuz, which has been largely closed since the US and Israeli strikes on Iran in late February.

Consequently, shipping has been severely limited, leading to a rise in oil prices, the same cause of elevated petrol costs in the Netherlands this year.

Notably, not all sectors enjoyed growth. The food, drink, and tobacco industry witnessed the most substantial decline, with a 6.7% decrease in turnover, mainly attributed to falling selling prices. Consumers are unlikely to feel this decrease in their shopping experiences anytime soon, as there are multiple stages between the factory and the supermarket shelf.

Manufacturers are currently optimistic about the upcoming months, with a higher percentage expecting increased turnover than at any point since mid-2022. Nonetheless, many still face labor shortages, and a slightly higher number of industrial companies went bankrupt compared to the previous year, according to CBS.