Dutch PMI dives to record low, job market totters

AMSTERDAM, Dec 1 (Reuters) - The Dutch NEVI/DPA Purchasing Managers' Index plunged to a record low in November, signalling a sharp deterioration in Dutch manufacturing industry.

The PMI fell to 38.7 from 45.3 in October and has been below the neutral mark of 50 that separates growth from contraction for five consecutive months.

The Dutch economy, which accounts for about six percent of euro zone Gross Domestic Product, is on the edge of a recession after stagnating in the second and third quarters.

Indicators for new orders and employment touched record lows, supporting the expectation that the Dutch unemployment rate, at 2.5 percent in September as measured by Eurostat and far below the 7.5 percent euro zone average, is set to rise.

"Anecdotal evidence suggested that Dutch manufacturers were being hit hard by the crisis in the world automobile and transport equipment sectors, especially with regard to exports," Markit Economics, which compiles the monthly survey, said in a statement.

Backlogs fell at the fastest pace since data on these were first collected in October 2002, and manufacturing production declined at the fastest rate since the immediate aftermath of the attacks of Sept. 11, 2001, the data showed.

A number of major Dutch companies have slashed jobs, most recently Philips , which will lay off 5 percent of the workforce at its healthcare division as part of an accelerated cost-savings push sparked by the global economic slowdown.

The Dutch temporary staffing market, an early indicator of trouble on the labour front due to the high degree of flexibility it gives companies, has been contracting since June, with year-on-year declines accelerating to 6 percent in October, according to industry association ABU. "On the prices front, November data indicated that the combination of weak demand, the global economic downturn and the unwinding of world commodity prices was exerting downwards pressure on both purchasing costs and factory gate prices," Markit Economics said. (Reporting by Niclas Mika; editing by Stephen Nisbet)