State of the economy: further improvement

According to the Business Cycle Tracer, the improvement in the economy has continued in February 2006. Based on new monthly information the indicators in the Tracer have improved compared to January. The fifteen indicators are moving upward.

In February 2006 consumer confidence was virtually identical to that of the preceding month. Producer confidence in the manufacturing industry further increased in February and reached the highest level since the end of 2000. Companies in the business services sector expect more orders and higher turnover in the first quarter.

The Dutch economy grew in the fourth quarter of 2005. The volume of gross domestic product (GDP) was 1.6 percent higher than one year previously. This is the largest increase in 2005. After correction for working day and seasonal effects, the volume of GDP was 1.0 percent higher than in the third quarter of 2005.

An increase in exports and higher household and government spending contributed most to the economic growth in the fourth quarter. Spending on durable goods improved in particular. Manufacturing output lags behind in the fourth quarter of 2005.

Inflation dropped sharply in January and was 1.3 percent. The capital market interest rate of the latest 10-year central government loan hardly changed in January. Selling prices in the manufacturing industry rose in January on December.

Unemployment, adjusted for seasonal effects, declined further. In the fourth quarter of 2005 the number of jobs was slightly higher than in the same quarter a year previously. The number of vacancies remained high. In the third quarter there was a further increase of the hours worked in temp jobs.

Gross domestic product