Economic situation fairly stable over the past six months

According to Statistics Netherlands’ Business Cycle Tracer, the economic situation in October was about the same as in September. The economic recovery is still fragile. In the period from the summer of 2013 to the spring of 2014, the economy improved steadily, but since then recovery has come to a virtual standstill. The economic climate over the past six months has been stable. In October, improvements and deteriorations again cancelled each other out.

Statistics Netherlands’ Business Cycle Tracer is a tool used to monitor the economic situation and economic developments. The Business Cycle Tracer uses a selection of fifteen key macro-economic indicators, which – together - provide a coherent picture of the state of the economy at a particular moment in time.

Business cycle tracer indicator (unweighted average of the fifteen indicators in the Business Cycle Tracer)

Consumers and producers more positive about the future

The mood among Dutch manufacturers improved substantially in the past month. Optimists again outnumber the pessimists. Manufacturers are far more positive about their expected output and their order positions.

The mood among Dutch consumers also improved in past month. Consumers are more positive about the economic climate. Consumer confidence is still negative, but the indicator is currently above its long-term average over the past twenty years. Growing confidence among producers and consumers in October comes after two months of declining confidence, predominantly due to the tensed situation at the international political level.

Producer and consumer confidence, seasonally adjusted

Consumers spend more, exports increase mediocre and investments down

Household spending on goods and services was 1.5 percent up in August 2014 from August 2013, the most substantial growth in nearly four years. Dutch households spent much more on durable goods like, for example, clothes, home furnishing articles and household appliances. Prior to the stabilisation and modest growth over the last four months, household consumption had been in decline almost continually for nearly three years.

The volume of exports of goods was 1.2 percent up in August 2014 from August 2013, versus an increase by more than 4.0 percent in July. Re-exports almost entirely accounted for the growth of exports. Exports of Dutch products declined.

Exports of electrical machinery and optical equipment and transport equipment were considerably up from one year previously as a result of higher re-exports and exports of Dutch products. Exports of refined petroleum derivatives, on the other hand, fell dramatically.

The volume of investment spending on fixed capital formation was 3.8 percent lower in August 2014 than in August 2013, mainly due to lower investments in residential and non-residential property and means of transport, but investments in computers, machinery and installations were above the level of one year previously.

Since October 2013, investments have risen, but the recovery process came to a halt in May and June. In July 2014, investment spending on fixed capital formation picked up, but declined again in August.

Sustained growth manufacturing output

The average daily output generated by Dutch manufacturing industry was 1.4 percent up in August 2014 from August 2013. The sector electrical products and machinery accounted for the main part of the increase. Since October 2013, manufacturing output has been almost consistently above the level of one year previously.

Output generated by the sector electrical products and machinery was substantially higher, but output generated by the sector food, drinks and tobacco sector and the sector basic metal and metal products decreased.

In the fourth quarter of 2014, the capacity utilisation rate of machinery and installations is back to the level of the second quarter, after a dip in the third quarter. In the third quarter, the rate declined marginally for the first time in twelve months.

Situation on the labour market also improved

The situation on the labour market is also improving. The number of jobs of employees decreased only marginally in the second quarter of 2014. Unemployment has deceased for five months in a row now as more people find employment. In September, 8.0 percent in the Dutch labour force were unemployed, so the unemployment rate remains high. The number of businesses declared bankrupt fell substantially after a peak in mid-2013, but is still relatively high compared to the years prior to the recession. 

The number of unfilled job vacancies rose marginally in the second quarter of 2014. The number of job vacancies has risen for the fourth consecutive quarter. The total number of hours worked in temp jobs was somewhat higher in the second quarter of 2014 than in the preceding quarter. The number of temp hours has risen since the second quarter of 2013. The increase is mainly due to a rise in the amount of long-term temporary contracts, e.g. secondment and payrolling.

Gross Domestic Product (seasonally adjusted)

Modest economic growth

The most recent economic growth figure refers to the second quarter of 2014. The Dutch economy grew by 0.7 percent relative to the first quarter of 2014. Quarter-on-quarter growth figures are adjusted for calendar and seasonal effects. The economic growth rate in the second quarter of this year was 1.1 percent compared to the same period in 2013. Exports are the motor behind the economic growth in the Netherlands.

The volume of the Dutch economy was approximately 0.3 percent up in the second quarter of 2014 from the last quarter of 2013. Compared to the economic boom in the first half of 2008, the Dutch economy contracted 2.4 percent.

More figures can be found in the Business cycle dossier.

For more information on economic indicators, see the Economic Monitor.