The economic recession in the Netherlands in 2003 (–0.7 percent) is largely the result of the disappointing operating results for companies in the sectors agriculture, construction, mineral extraction and manufacturing.
Electrical engineering under pressure
The volume of value added of goods producers was 2.2 percent smaller in 2003 than in 2002. This put a brake of 0.6 of a percent point on economic growth in that year.
Manufacturing companies produced 2.3 percent less than in 2002, making 2003 the worst year for this sector since 1993. Electrical engineering, in particular, had a disappointing year: the production volume in this sector was 6 percent smaller than in 2002, especially because of decreased exports.
Shares in economic growth per sector of industry, 2003
Slump in construction
For producers of furniture, wood and construction materials 2003 was also a unsatisfactory year. The decrease in production was partly caused by a slump in the construction industry: production volume in construction fell by nearly 4 percent for the second year in succession. Many clients in this sector have postponed building plans. For office buildings this is because of the record amount of square metres of unused office space. The completion of only 60 thousand new homes in 2003 was a historically low number for house construction. One reason for this was the end of the Vinex home construction programme.
Farmers also produced less in 2003: the warm dry summer meant fewer potatoes, and the smaller areas on which flowers were grown ld to fewer cut flowers. The fowl pest epidemic resulted in lower production levels for poultry farmers.
Growth for the petrochemical industry
The petroleum industry and companies in the chemical industry did better in 2003. Production volume rose by 4.4 percent. Oil refineries, petrochemical companies and the fertiliser and nitrogen industry contributed most to this growth.
Production and income, 2003
Farmers’ incomes down
Nearly all good producers benefited from the improved ratio of selling prices to cost prices and also from the only very small increase in labour costs in relation to the increase in production value.
Farmers did not benefit in this respect, however. Selling prices in agriculture were lower on average than in 2002 and the decrease was not compensated by lower cost prices. The income of farmers therefore decreased in 2003.
Nico van Stokrom en Ron van der Wal