The Dutch economy in the second quarter of 2004 saw a 1.0 percent growth rate compared to one year earlier. The growth rate is virtually the same as in the first quarter of 2004, according to the preliminary estimates of the quarterly accounts by Statistics Netherlands. Although employment in the second quarter of 2004 fell, it did so by less than in the previous quarters.
Pushing the slight growth in the volume of the gross domestic product (GDP) is the strong recovery in exports. Household consumption and investments were a fraction lower than in 2003.
Negative quarter-on-quarter growth
The volume of GDP in the second quarter of 2004, once the seasonal and working day effects are corrected, was 0.2 percent lower than the first quarter of 2004. After three quarters of positive quarter-on-quarter growth there was negative growth. Economic growth in the first quarter got an extra stimulus because of the positive weather for construction in that quarter. This led to a striking increase in production of construction. This incidental effect disappeared during the second quarter.
Strong recovery of exports and imports
In the second quarter of 2004 the volume of exports of goods and services was up by 6.7 percent on the same quarter of 2003. This is considerably more than the 2.3 percent growth rate in the first quarter of 2004. Moreover it is the highest growth rate since the end of 2000. The largest increase occurred in re-exports. Also the exports of Dutch manufactured goods saw a major increase. The import volume was up by 5.5 percent.
Investments slightly lower
The volume of investments in fixed capital formation in the second quarter of 2004 was down by 0.8 percent on the same period in 2003. Enterprises invested less in offices, commercial buildings and also in infrastructure. Fewer airplanes were delivered to Dutch companies. The first quarter had seen an increase in investments because of the delivery of airplanes and the favourable weather for investments in construction. Investments in computers increased strongly during the second quarter of 2004. Investments likewise increased in dwellings, machinery and company cars.
Modest growth in government consumption
The volume of government consumption was 0.7 percent higher than in the same quarter of 2003. The increase is substantially smaller than the growth rates in recent years, and concentrated on expenditure in care and to a lesser extent in education. Real expenditure in public government in the second quarter of 2004 was about the same as in 2003.
Household consumption virtually unchanged
Households spent about the same in the second quarter of 2004 as in the same quarter of 2003. The same was true in the first quarter. In 2003 household consumption fell by 0.9 percent. The volume of the consumption of services increased slightly in the second quarter of 2004. Expenditure on goods, however, were lower than the year before. The largest decrease was found in the expenditure on durable consumer goods, especially the purchase of cars, furniture and other home furnishings.
Slight production growth in most branches of industry
In contrast with previous years the production increases in the second quarter among the producers of goods, commercial services and non–commercial services, government and care were at about the same level. Industry, trade and transport benefited most from the impulse provided by the recovery in exports. Within the manufacturing industry both the production of the chemical industry and of the metal industry increased. Production in construction was lower than in 2003 because of the dip in the market for office and commercial buildings.
Employment not falling as fast as before
Dutch employment in fulltime equivalents was down 1.4 percent in the second quarter than in the second quarter of 2003. This decrease is not as big as in the two previous quarters. Labour productivity, GDP volume per working year, was over 2 percent higher in the second quarter than the year before; substantially higher than in the previous three years.
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