State of the economy: moving towards higher growth

According to the Business Cycle Tracer, the economy has shown further improvement in March 2006. Most indicators in the Tracer show that the economy is moving towards a period of substantial growth.

Consumer confidence was up again in March. Since September 2005 consumer confidence has gradually improved. Producer confidence in the manufacturing industry further increased too and reached the highest level for five years. 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 equalled the growth in the second and third quarter. After correction for working day patterns and seasonal effects, the volume of GDP was 0.8 percent higher than in the third quarter of 2005.

In January household consumption was 1.5 percent up on January 2005 after correction for prices and shopping day patterns. Spending on durable goods improved in particular. In January the export volume of goods, adjusted for working day effects, was 4 percent higher than in January 2005. Manufacturing output was slightly lower in January.

Inflation dropped in February and was 1.1 percent. The capital market interest rate of the latest 10-year central government loan in February was 0.2 percentage points up on January. Selling prices in the manufacturing industry slightly rose in February on January.

Unemployment, adjusted for seasonal effects, fell further. There were slightly more jobs in the fourth quarter of 2005 than in the third quarter. This continues the slight recovery in employment in the course of 2005. The number of vacancies remained high, there was a further increase of the hours worked in temp jobs.

Gross domestic product