Economy improved in 2004

According to Statistics Netherlands’ Economic compass the Dutch economy has improved in the course of this year. Six of the eight indicators making up the compass show a more positive score than at the end of last year.

Economic compass, 31 December 2004 and 31 December 2003

Exports up substantially

The volume of goods exports has shown a clear improvement. After correction for working days the volume increase of exports rose to over 10 percent. One important cause was the increase in the amount of natural gas exported. In addition, exports of iron and steel also rose substantially, and more electrical appliances such as audio equipment, TV’s and computers were sold abroad.

Goods exports

Favourable developments for interest and inflation

Interest and inflation have also improved. Interest fell by nearly 1 percent point in 2004, inflation by 0.7 of a percent point. The increase in manufacturing production is modest, but in 2003 it decreased. Lastly, the figures for household consumption and the number of bankruptcies are better than last year.

Factory prices increasing

Manufacturers’ prices have become less favourable in the space of one year. Compared with October 2003 prices were more than 8 percent higher in October 2004. Among other things the demand from the US, Japan and China have pushed up prices of a number of goods, such as petroleum, chemical products and steel, quite drastically. Higher selling prices may lead to higher inflation and can undermine the competitive position of the Dutch manufacturing industry.

The most recently available unemployment rate for 2004 was nearly 60 thousand higher than twelve months previously.

Factory prices manufacturing industry

Frans van Ingen Schenau