State of the economy: improved

According to various important indicators that recently became available, the economic situation in the Netherlands improved in mid-August. The Dutch economy grew 1.3 percent in the second quarter of 2005, whereas there was a negative growth of 0.5 percent in the first quarter. Recent monthly figures on manufacturing output and exports of goods already signalled an economic recovery. Other economic indicators, such as expected production in manufacturing industry and anticipated turnover in business services also provide a more positive picture of the current state of the Dutch economy. Other indicators do not signal any improvement of the economic situation.

With 4.9 percent, the volume growth of exports in the second quarter almost equalled the growth rate of the previous quarter. Exports of goods and services produced in the Netherlands improved. The volume of gross investments increased by 2.3 percent, notably due to higher investments in residential property and computers. Household spending in the second quarter of 2005 was down on one year previously, but the decrease was less robust than in the first quarter. The volume of government consumption decreased, after a stabilisation in the first quarter.

Companies in the business services sector expect more orders and higher turnover in the second quarter. Industrial entrepreneurs became much more optimistic in August than they were in July. Producer confidence recovered from the decreases of June and July. Consumerswere less positive about the Dutch economy in August than they were in July.

Selling prices and prices of intermediate consumption in the manufacturing industry rose in July on June 2005. Inflation remained stable in July. The capital market interest rate of the latest 10-y central government loan went up from 3.1 percent in June to 3.3 percent in July.

There are no clear signs of improvement on the labour market as yet. Unemployment, adjusted for seasonal effects, was stable in May-July. Employment decreased in the second quarter of 2005. The decrease in the number of jobs available is slowing down. In the second quarter the number of vacancies did not rise any further.

Gross domestic product