Disposable household income falls again

31/03/2014 15:00

Real disposable income down 1.1 percent in 2013
Mortgage debt decreases by 8 billion euros
Lower profits, higher dividend payments

Real disposable income of Dutch households was 1.1 percent lower in 2013 than in 2012. The decrease was smaller than in 2012, when disposable income fell by 2.2 percent. The decrease in 2013 was mainly caused by wage increases that were smaller than the inflation rate, decreasing employment, and an increase in taxes and social insurance premiums. At 2.5 percent, inflation was well above the average collectively negotiated wage increases. The number of employee jobs fell by 136 thousand. Partly because of the decrease in income, real consumption expenditure fell by 2.1 percent in 2013.

Financial wealth of households rose by 47 billion euros in 2013, to 1.2 trillion euros. Financial assets of households increased substantially, while debts rose by much less. Capital controlled by pension funds and life insurance companies, which is included in household assets, rose by 29 billion euros. The value of share portfolios held by Dutch households rose by 24 billion euros. The overall net outstanding mortgage debt of households fell by 8 billion euros in 2013, the first time the mortgage debt decreased since these statistics began in 1995. The decrease was partly caused by extra mortgage repayments and the stagnating house market, which has meant fewer new mortgages.

Profits from enterprise were down in 2013. Net profits of non-financial enterprises fell by 0.6 billion euros to 105 billion euros, and net profits of financial companies by 2.3 billion euros to 16 billion euros. The decrease in profits is mainly the result of poorer performance of foreign affiliates. In spite of the decrease in profits, Dutch enterprises paid more in dividend to their shareholders. Non-financial companies paid 37.7 billion euros, over 30 percent more than in 2012, while financial companies paid 10.2 billion euros, nearly a quarter more than in 2012.

Real net national income of the Dutch economy was 2.1 percent lower than in 2012. This increase was partly related to the 0.8 percent negative growth of GDP. As more money left the country on balance - as interest and dividend paid abroad - negative growth of net national income was larger than negative growth of GDP.