The growth rate of the Dutch economy in 2005 reached 1.1 percent. This is lower than the 1.7 percent growth rate in 2004, but well above the figures for the years 2002-2003. This is according to the second estimate made by Statistics Netherlands. The economic growth rate is 0.2 percent point higher than in the first estimate of February.
Again, exports were the driving force behind the continuous but modest economic recovery in 2005. Furthermore there was another slight increase in investments. There was a very modest increase in the consumption of households and government. 2005 had two working days less than 2004.
Upward adjustment of economic growth 2005
The Dutch economic growth rate of 2005 was upwardly adjusted by 0.2 percent point in the second estimate made by Statistics Netherlands. This is because the growth rates of the first three quarters were upwardly adjusted by 0.2 once, and twice by 0.3 percent point. There was no change in the growth of the gross domestic product (GDP) in the fourth quarter.
In the first three quarters of 2005 exports of goods and services turned out higher. To a lesser extent this is true for imports. Furthermore investments were estimated to be a fraction higher and government consumption slightly lower.
Economic growth recovering in the course of the year
In the fourth quarter of 2005, GDP was 1.6 percent higher than in the same quarter of 2004. This is the same growth rate as in the two previous quarters. The fourth quarter growth is due to the recovery in consumer expenditure and a growing export surplus.
The volume of GDP in the fourth quarter of 2005, corrected for working day patterns and seasonal effects, increased by 0.8 percent on the third quarter of 2005. The fourth quarter of 2005 had two working days less than the fourth quarter of 2004. The quarter-on-quarter growth rate of 0.8 percent is in line with the previous twp quarters. The economic growth has clearly increased in the course of 2005.
Export growth less expansive
In 2005 the volume of the exports of goods and services was 5.9 percent higher than in 2004. The growth rate is lower than in 2004, when exports increased by 8.5 percent. The export increase in 2005 is mainly in re-exports which reached a double digit growth rate. Re-exports are exports of goods produced elsewhere, for instance in China, Taiwan or the USA, which are distributed from the Netherlands after undergoing some processing. The increase of the exports of Dutch manufactured goods remains modest in comparison. Imports in 2005 increased by 5.1 percent, slightly below the growth rate for exports.
In the fourth quarter of 2005, exports were up by 3.6 percent on the year before. The growth rate of the imports was quite a way behind that of exports.
Household consumption recovering in the second half of 2005
In 2005 the volume of household consumption was up 0.3 percent on 2004. After a dip early in 2005 household consumption picked up in the second half of the year. The expenditure on durable goods improved most. After a two year dip they strongly increased in the fourth quarter of 2005, by almost 5 percent.
Slight increase in government consumption
The volume of government consumption in 2005 was up 0.5 percent on 2004. The increase took place in the second half of the year. This is partly due to extra expenditure to prepare for a change in systems. The real expenditure for care increased in the course of 2005.
More investments in homes and computers
In 2005 people invested 2.2 percent more than in 2004, keeping up the slight recovery in investment activities. In 2005 people invested substantially more in dwellings and especially in computers. On the other hand, investments in machinery and commercial property were down on 2004.
Production grows fastest in commercial services
In commercial services production increased by 2.5 percent, which is more than in the other branches of industry. In commercial services the growth occurred mainly in wholesale and in the transport sector, which benefited from the re-exports, and in the temporary employment agencies. There were also production increases in banks and insurers and in business services such as computer service bureaus and advertising agencies.
Construction benefited from a recovery in housing construction. Agriculture produced more. And, thanks to health care and social work, the production in non-commercial services also increased a little.
The Dutch manufacturing industry produced slightly less than in 2004 and lagged behind earlier periods of economic recovery. This is due to negative growth in electrical equipment and in the means of transport industries. The energy sector was confronted by a substantial reduction in the sales of natural gas.