The Dutch economy grew by 0.9 percent in 2005. This is nearly half the growth rate in 2004. The decrease was mainly accounted for by the fact that 2005 had two working days fewer than 2004, and the smaller production of natural gas. After a bad start, economic recovery became more sturdy in the course of 2005.
Exports power the economy
Just as in 2004 exports and re-exports contributed most to economic growth. In addition, fixed capital formation and consumption also made modest contributions. Investment in dwellings and company cars, and especially in computers, was up substantially.
Consumption grows slightly
In the second half of 2005, household consumption rose again for the first time since the beginning of 2002. Consumers bought more durable goods in particular, such as consumer electronics and furniture. Government consumption was also higher than in 2004, but not as high as in 2002 and 2003. In the latter two years it was government consumption that boosted the economy.
Labour market more positive
The strong improvement in the economy is also making itself felt on the labour market. After a sharp fall in 2004, the number of employee jobs fell slightly on average in 2005. In the course of the year, however, employment clearly improved. At the end of 2005 there were more jobs than at the ed of 2004, especially temporary jobs. The number of vacant jobs also increased last year. After three years of substantial growth, in 2005 unemployment remained at the same level as in 2004.
Low growth in international perspective
In the eurozone and the US, too, economic growth was smaller in 2005 than in 2004. This is connected with the slightly less exuberant world trade and higher oil prices. Economic growth in the Netherlands has been lower than growth in the eurozone for a number of years now. The difference with the US is larger , there the economy has been growing faster than Europe for a long time.
A steady improvement in the economy can be sensed behind the modest growth in 2005. A number of economic indicators clearly improved in the course of 2005. Fewer people were unemployed, for example, and there were more jobs, more vacancies and an increased demand for temporary employees. Consumption is picking up, too. The fourth quarter was the best quarter of 2005.
Ben van Cleef