The Dutch economy was in far better shape in 2010 than in 2009. Economic growth was 1.7 percent, following an unprecedented 3.9 percent decrease in 2009. Dutch exports of goods and services grew by 10.9 percent and became the driving force behind economic growth. Household consumption was slightly higher than one year previously. Investments were still lower than one year previously, but the reduction was more than halved.
Disposable for final expenditure and final expenditure (volume)
Exports pick up
Exports growth played a key role in the economic upturn in 2010. This is consistent with the current stage of the business cycle. After a period of economic decline, world trade picked up again. The export-oriented Dutch economy benefited from the growing demand from abroad. In the wake of higher exports, Dutch manufacturers stepped up production. In 2010, manufacturing output was 7 percent higher than in 2009. Household consumption grew by 0.4 percent and government consumption by 1.5 percent, also contributing somewhat to economic growth. Investment in fixed capital formation was 4.9 percent down in 2010.
Radars point the way
Traditionally, a substantial part of Dutch exports go to countries in the eurozone, most notably to Germany. German industrial production boomed and subsequently its manufacturers there are in a good mood. In the eurozone, producer confidence and the mood about export orders improved. The Exports Radar shows how circumstances influencing Dutch exports develop. In the last year and a half, they have improved almost continually.
Households spent fractionally more in 2010 than in 2009, thus contributing marginally to economic growth. Among other things, household consumption is related to consumers’ expectations about their own financial situation in the next 12 months. These were fairly negative in 2010. Expectations about future unemployment have clearly improved, on the other hand. Developments in capital and developments on the labour market are also relevant for consumer spending. The Consumption Radar shows that conditions for consumption have gradually been improving since the low point in April 2009.
Investments in fixed capital formation declined further in 2010, but the reduction was far smaller than in 2009. In addition, investment improved distinctly in the course of the year. The indicator even showed marginal growth in the fourth quarter compared with twelve months previously. The Investment Radar confirms that circumstances for Dutch investment became less unfavourable. Private sector investment is sensitive to the situation on the commodities markets, the availability of financial means and the capacity utilisation rate in manufacturing industry.Karin van der Ven