Economy partly bounces back with 7.7 percent growth in Q3 2020

Households spent 9.4 percent more in Q3 than in Q2 2020. Public consumption rose as well, by 6.3 percent. Exports and imports of goods and services increased by 8.6 and 6.8 percent respectively. Finally, investments were up by 6.3 percent.

In particular, the higher production in the sector trade, transport and storage, accommodation and food services and in the care sector has a large share in the GDP increase. Manufacturing and business services also contributed significantly.

Impact of the coronavirus crisis on the first estimate

Due to the coronavirus crisis, the growth figures are surrounded by greater uncertainty than usual during a first estimate.

The rest of this news release deals with economic development compared to Q3 2019.

GDP 2.5 percent down on Q3 2019

According to the first estimate, GDP contracted by 2.5 percent relative to Q3 2019. The year-on-year contraction was mainly due to lower household consumption, but also to declining investments in fixed assets. However, public consumption and the trade balance contributed positively.

Decline in consumer spending smaller than in the previous quarter

In Q3 2020, consumers spent 4.8 percent less than in Q3 2019. The contraction is considerably smaller than the -12.7 percent in the second quarter. In Q3, consumers mainly spent less on accommodation and food services, recreation and culture, and transport and communication. However, they spent more on goods, particularly food, home furnishings and electrical appliances. Retail trade achieved record growth in the third quarter.

Public consumption grew by 1.9 percent. Consumption in kind (especially expenditure in the field of health care) and collective consumption (expenditure on public services such as police, defense and public administration, which cannot be attributed to individual citizens) were higher in particular, compared to Q3 2019.

Fewer investments in construction and transport equipment

In Q3 2020, the volume of investments in fixed assets was 4.2 percent down on the same quarter last year. Investments were down in almost all asset types. Investments in dwellings, office buildings, infrastructure and transport equipment such as passenger cars, lorries and semi-trailers declined in particular. However, investments in computers were up year-on-year.

Decline in exports and imports

Exports of goods and services in Q3 2020 were 3.9 percent lower than in Q3 2019. Substantial year-on-year declines were mainly recorded in service exports (e.g. spending by international visitors within the Netherlands) as well as exports of petroleum products. On the other hand, exports of electrotechnical machinery and appliances grew most sharply. Domestic exports contracted by 3.1 percent, while re-exports (exports of previously imported products) were slightly up by 0.9 percent.

Imports of goods and services declined by 10.6 percent, mainly on account of services (including spending by Dutch travellers abroad) and petroleum. On balance, the trade balance made a positive contribution to economic growth.

Again major contraction in sectors most affected by coronavirus in Q3

In Q3 2020, output in the sector culture, recreation, sports and other services was nearly 24 percent lower than twelve months previously. Contraction was almost 37 percent in the previous quarter. 

Production in the sector trade, transportation and accommodation and food services was down by 2.3 percent relative to one year previously. The contraction was considerably smaller than in the second quarter. Trade, especially retail, produced more than one year previously, but accommodation and food services and transportation still experienced a major decline. In accommodation and food services, however, it was substantially smaller than in the previous quarter due to the relaxation of the measures against the spread of coronavirus. The contraction in the transport sector was also slightly smaller, but the situation for aviation and aviation services was again very negative.

Within the business services sector, production in the temporary employment and travel sector plummeted in particular. The production of total business services was down by 8.5 percent year-on-year.

Manufacturing contracted by 2.1 percent, with the largest decline in the petroleum and transport equipment industry and the largest increase in the food, beverages and tobacco industry. Construction also produced less than one year previously (-3.0 percent).

Production in the health care sector grew slightly again in Q3. In Q2, production was still more than one-fifth lower than twelve months previously, because fewer health and care services were provided on balance in the first months of the coronavirus crisis.

First estimate

The first estimate is published 45 days after the end of a quarter and is conducted based on information available at that moment. It provides an initial picture of the state of the Dutch economy. After the first estimate, new data continue to pour in which are used to make new calculations. The second estimate on economic growth will be released on Thursday 24 December. In absolute terms, the adjustment of the second estimate relative to the first estimate has averaged nearly 0.04 percentage points over the past half decade, with the two extremes ranging between - 0.1 and + 0.2 percentage points.

With each new estimate, CBS also recalculates the new seasonally adjusted figures of previously published quarters. This recalculation has not resulted in an adjustment of the previous three quarters.