Commercial services more important for the economy

08/09/2003 10:00

In the second half of the nineties companies in the commercial services sector contributed most to economic growth, with growth rates of more than 5 percent for a number of years in a row. Since 2001 these companies have hardly grown at all, however, and in the first half of 2003 the contribution by this sector to the economy was even negative for the first time in more than twenty years.

Rise and fall

Only non-commercial services contributed positively to the economy in the first half of 2003. The volume of value added of this sector was 2.4 percent higher than in the first half of 2002. Goods production fell by 1.9 percent in the first six months, and the production of commercial services was 0.5 percent down.

Value added by producer group

Value added by producer group

Share of goods production in GDP falling

The contribution by goods producers to the growth of GDP fluctuates strongly from year to year. Also, the strong average growth of this group of producers has lagged behind the GDP growth rate. This means that their share in GDP has fallen from 32 percent in 1990 to 28 percent in 2002.

Growth rate commercial services slowing down

With average growth rates higher than those for GDP, producers of commercial services contributed most to economic growth in the period 1990-2000. In the second half of the nineties high growth was measured for IT companies, temp agencies ad telecom companies. The share of commercial services in GDP rose from 43 percent in 1990 to around 50 percent in 2000.

Since 2000 the growth rate has gradually been slowing down; in the first half of 2003 the contribution of this sector to GDP growth was even negative.

Value added by producer group

Value added by producer group

Higher spending on care

The growth in non-commercial services lagged behind GDP growth in the nineties. The share of this sector in GDP shrank from 25 percent in 1990 to 21 percent in 2000.

Since 2001 the growth rates have been picking up again, though. Indeed, in the first half of 2003 providers of non-commercial services are the only group with a positive contribution to GDP growth. The reason behind this is higher spending on health care, welfare, education and public administration.

Nico van Stokrom