Economy doing even better

The economy is showing an even more positive picture at the end of June than at the end of May. The indicators in the Business Cycle Tracer are firmly rooted in the high economic growth stage (green quadrant). This means that growth is increasing and above the long-term average for most indicators.

In June consumer confidence is up much more. For the first time in five years there are more optimists than pessimists. Producer confidence in the manufacturing industry increased in June to the highest level since November 2000. Companies in the business services sector expect more orders and higher turnover in the second quarter.

The economy saw robust growth in the first quarter of 2006. The gross domestic product (GDP) was up by 2.9 percent on the year before. It is the highest growth rate in over five years. After correction for working day patterns and seasonal effects, the volume of GDP was 0.2 percent higher than in the fourth quarter of 2005. The quarter-on-quarter growth is clearly less than in the previous three quarters.

The volume of exports, adjusted for working day effects, was 8 percent higher in April than one year previously. Manufacturing production was slightly higher than a year before. After correction for price changes and differences in shopping day patterns, household consumption  was 3.8 percent up. This is higher than the growth in the first quarter.

The capital market interest rate of the latest 10-year central government loan rose further and came in May to 4.0 percent. Inflation rose by 0.1 percentage points to 1.3 percent. Prices in the manufacturing industry increased by 7,2 percent compared to May 2005.

Unemployment fell further in the period March-May. The recovery in employment continued in the first quarter of 2006. The number of vacancies remained high. There was a further increase of the hours worked in temp jobs.

Gross domestic product