State of the economy: further improvement

According to the Business Cycle Tracer, the improvement in the economy has continued in December. Nearly all indicators in the Tracer have improved from November to December. By far most of them are moving upwards, although they are still concentrated in the recovery stage of the cycle.

The gross domestic product (GDP) was 1,3 percent higher in the third quarter than one year previously. Fixed capital formation was 6.6 percent higher. Housing construction picked up and spending on computers was extremely high.

Households spent 1.2 percent more in October than one year previously. Manufacturing output was in October about the same level as in October 2004. The volume of goods exported from the Netherlands in October was 4 percent higher than one year previously. The growth rate of the export volume in the past four month was on average 2 percent lower than in the first six months of 2005.

Consumer confidence was up again in December. This was the third increase in a row. Consumer confidence is now at its highest level for three and a half years.  Producer confidence in manufacturing industry was nearly unchanged in December. Entrepreneurs in the business services sector expect more orders and higher turnover in the fourth quarter.

Selling prices and prices of intermediate consumption in the manufacturing industry declined in November from October. Inflation increased in November to 1.8 percent. The capital market interest rate of the latest 10-year central government loan was 0.2 percent point higher in November than in October and is back at the level of April 2005.

Unemployment, adjusted for seasonal effects, declined slightly in the period September-November compared to the preceding months. In the third quarter of 2005 the number of jobs was slightly higher than in the second quarter. The number of vacancies rose strongly in the same period. In the third quarter there was also a further increase of the hours worked in temp jobs.

Gross domestic product