According to the first estimate of the Quarterly Accounts by Statistics Netherlands, the Dutch economy saw a growth of 1.4 percent in the third quarter of 2004 compared to the third quarter of 2003. This is the highest growth rate in three years. Employment decreased a little less in the third quarter than in the two preceding quarters.
The substantial recovery of exports contributed most to the volume growth of the gross domestic product (GDP). Household and government consumption in the third quarter showed modest growth compared to the previous year. Investments in fixed capital formation were somewhat lower.
Modest quarter-on-quarter growth
GDP volume in the third quarter of 2004 was up by 0.2 percent on the second quarter of 2004. The figure is corrected for calendar and seasonal effects. The slightly positive growth follows a period of slightly negative growth in the second quarter. Before that, quarter-on-quarter growth had been positive in the three previous quarters.
Again powerful increase in exports and imports
In the third quarter of 2004 the volume of exports of goods and services was up by 8.3 percent on the same quarter of 2003. This made year-on-year export growth even faster than in the first two quarters of this year. In 2003 exports increased by 0.0 percent. Dutch exports in the third quarter of 2004, moreover, saw the highest growth rate since the end of 2000.
Imports increased almost as much as exports in the third quarter of 2004, namely 8.4 percent.
Investments down due to reduced building activity
Dutch investments in fixed capital formation were down 0.6 percent on the third quarter of 2003. This is entirely due to lower investments in construction. People invested less in offices, commercial buildings, dwellings and infrastructure. However, they invested more in machinery and installations. This is in line with a higher degree of capacity utilisation in industry in 2004. Investments were also up in company cars and computers.
Growth in government consumption mainly attributed to care
The volume of government consumption in the third quarter was up by 0.6 percent on the third quarter of 2003. This is substantially lower than the growth rates in previous years. The increase is entirely attributable to care expenditure. Real expenditure on education and public government in the third quarter of 2004 were slightly lower than a year earlier.
Modest growth in household consumption
In the third quarter of 2004 the volume of household consumption was 0.6 percent higher than in the third quarter of 2003. This is a slightly higher increase than the 0.4 percent of the first two quarters of 2004. In 2003 consumption fell by 0.9 percent. Expenditure on services and food, corrected for price changes, was higher in the third quarter of 2004 than in the third quarter of 2003. Expenditure on durable consumer goods was lower, especially on furniture and cars. The decrease in expenditure on durable consumer goods, however, is the lowest in eighteen months.
Production growth in agriculture, gas, trade and transport
In the third quarter, trade and transport benefited most from the modest economic recovery. The Netherlands sold far more gas, especially abroad. Harvests in agriculture were better than last year. Industrial production did not increase substantially. Production in the metal industry was higher, but for the first time in 30 months production in the chemical industry was down mainly because of maintenance work on the installations.
The recovery of agencies providing temporary work contributed positively to the slight growth in financial and business services. The growth in non-commercial services came entirely from care. Construction produced far less, especially due to the slump in the market for offices and commercial buildings and the downturn in investments in infrastructure.
Increased labour productivity
Employment for employees, measured in fulltime equivalents (FTEs), was 1.7 percent lower in the third quarter of 2004 than in the third quarter of 2003. This decrease is a bit less than in the previous two quarters. Labour productivity, the volume of the production per FTE, was about 3 percent higher in the third quarter than last year. This is a much higher increase than in the previous three years.
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