Economic situation remains favourable

The economic picture at the end of May is slightly better than that at the end of April. This is mainly because of increased optimism among manufacturers and the sharp fall in unemployment. The heart of the indicators in the Business Cycle Tracer is a little higher in the high economic growth stage, which means that the growth rate of most indicators is increasing and above their long-term average.

In the first quarter, the volume of the gross domestic product (GDP) was 2.5 percent up on one year previously. However, the first quarter of 2007 had one working day fewer than the same period in 2006. After adjustment for seasonal effects, GDP volume grew by 0.6 percent compared with the fourth quarter. This quarter-on-quarter growth rate is in line with the growth rate in the seven preceding quarters.

Consumer confidence hardly changed in May. The mood indicator among manufacturers approached the highest level ever recorded. The majority of the business service providers expected to receive more orders and to generate a higher turnover in the second quarter of this year.

Dutch manufacturing industry is still thriving. Manufacturing production in March was 6 percent up on last year, thus equalling the growth in February. The growth rate of industrial production is the highest since May 2000. In February, the volume of exports of goods was 9 percent higher. Compared to February 2006, household spending has risen slightly.

The capital market interest rate stood at 4.2 percent in April. Inflation stood at 1.8 percent, unchanged compared with March. In April selling prices in the manufacturing industry were 1.5 percent up. Price increases over the last eight months range between 1 and 2 percent.

Unemployment has not been this low in four years. In the period February-April the seasonally adjusted unemployment figure stood at 370 thousand. In the first quarter, there were 212 thousand job vacancies. In the fourth quarter, there was a continuous rise in the number of jobs and the number of hours worked in temp jobs.

Gross domestic product (GDP)