Flash estimate: export accounts for economic growth

• Flash estimate indicates 0.5 percent economic growth relative to first quarter 2014
• First estimate indicates 0.9 percent economic growth compared to second quarter 2013
• Number of jobs falls less rapidly relative to preceding quarter

According to the so-called flash estimate of economic growth conducted by Statistics Netherlands, which is based on an incomplete set of currently available data, the Dutch economy grew 0.5 percent in the second quarter of 2014 relative to the first quarter. Exports largely account for the growth. The flash estimate is a first calculation, 45 days after the end of a quarter, based on information available at that moment. By means of a flash estimate, Statistics Netherlands provides a first indication of the economic situation in the Netherlands. After this first estimate, more and more economic data will become available, which will serve as a basis for more up-to-date estimates.  Statistics Netherlands will publish the second estimate of economic growth on Wednesday 24 September. Over the past five years, the average adjustment of the second estimate compared to the flash estimate was 0.06 percentage points with the extremes ranging between -0.3 and +0.4 percentage points.

The second-quarter growth comes after a quarter of economic contraction, but, on balance, the economic situation in the Netherlands has improved marginally at the end of June 2014 compared to the end of June 2013. The job market is also showing signs of recovery. The number of employee jobs fell by 8 thousand in the second quarter, versus a decline by 18 thousand in the first quarter. The positive trend reflects the increase in the number of job vacancies. Statistics Netherlands will also publish a press release on job vacancies today.

Because a new quarter becomes available, each new estimate on economic growth also includes new figures adjusted for seasonal variation for all quarters published earlier. On the basis of the new calculation, the economic contraction over the first quarter of 2014 was adjusted downwards from 0.6 to 0.4 percent.

In the part of the press release that follows, results referring to a particular period are always compared to the results of the same period one year previously.

Flash estimate indicates 0.9 percent economic growth relative to one year previously

According to the flash estimate, the Dutch economy grew 0.9 percent in the second quarter compared to the second quarter of 2013. Exports largely account for the growth and - to a lesser extent - investments. Household consumption was at the same level as one year previously; government consumption was marginally higher.

Exports of metal products and machinery substantially higher

Exports of Dutch products as well as re-exports, i.e. exports of previously imported products, grew. Exports of natural gas and petroleum derivatives declined, but the decline was offset by a sharp increase in exports of (basic) metal products, machinery and installations. The export of agricultural products also rose considerably.

Consumption at same level as one year previously

Consumer spending was at approximately the same level as one year previously. The relatively mild weather conditions also had a downward effect on natural gas consumption in the second quarter. Consumer spending in the sector hotels and restaurants was up and Dutch consumers also spent more on durable goods, like clothes, electronic equipment, household appliances and cars. Household spending on durable goods has grown since late 2013, after more than two years of substantial decline.

Sustained growth investments in machinery and computers

Just as in the preceding quarters, investments were up compared to one year previously, although the growth rate slowed down relative to the first quarter. Private sector investments in machinery and computers were higher, which agrees with the higher capacity utilisation rate and improved producer confidence in manufacturing industry. Investments in construction decreased, in particular in infrastructural projects.

Growth manufacturing  industry slows down

Partly as a result of higher sales on the foreign market, manufacturing output was 1.5 percent up in the second quarter from one year previously, but the growth rate in manufacturing industry slows down (3.7 percent in the first quarter). The production of basic metal products and machinery was higher.

Output was also up in the sector agriculture, forestry and fishery and in transport, trade, hotels and restaurants and business services. The growth of exports had a positive effect on transport and trade, but output generated by the sector mineral extraction declined, as less natural gas was extracted. Output also declined in the sectors power supply, construction and financial institutions.

Fewer employee jobs, but more temp jobs

In the second quarter of this year, the number of employee jobs fell by 80 thousand relative to the same period last year. Jobs were lost across nearly all sectors. With 35 thousand, the most dramatic loss was recorded in the sector health care and welfare. Since the end of 2012, jobs have been lost in the care sector, mostly in child care and home care.

In the construction sector, the number of jobs was reduced by 21 thousand relative to one year previously. This is the result of a sharp output drop in previous years. Job losses were also high the sector financial services.

In the sector business services, the number of jobs grew by 14 thousand jobs compared to one year previously, mainly temp jobs. If the number of temp jobs grows, this is usually a first indication of employment recovery. In a later stage, companies themselves start hiring staff again.