Manufacturing curbs economic growth

09/05/2006 14:00

The Dutch manufacturing industry contributed minus 0.1 of a percent point to economic growth in 2005. Dutch economic growth totalled 1.1 percent in 2005.

GDP growth by producer category, 1978–2005

GDP growth by producer category, 1978–2005

Car production plummets

The electrical engineering and transport equipment sectors performed poorly last year. Value added in these sectors fell by as much as 6 percent in 2005. In electrical engineering this was caused by a fall in domestic turnover. The lower production in the transport equipment sector was connected with a drop in the number of cars manufactured by no less than 40 percent.

Contribution to economic growth by sector of industry, 2005

Contribution to economic growth by sector of industry, 2005

Reduced demand for natural gas

The lower production of natural gas had a negative contribution of 0.2 of a percent point to economic growth. Less gas was extracted in 2005 because of the strong fall in foreign demand and the higher average temperatures in the Netherlands. This pushed down the production volume of the mineral extraction sector by 8 percent.

Agriculture production up slightly

Dutch farmers produced 1 percent more in 2005 than in 2004. Cereal and horticultural food crops were higher, and cattle farmers also did well. The potato crop was lower than in 2004, though, and the production of flowers and plants fell by nearly 2 percent. This was mainly because of a decrease in exports of cut flowers to the main export market, Germany.

More new houses

Production in the construction industry grew by 2 percent in 2005, mainly pushed up by a 6 percent increase of in investment in dwellings. Nine percent more building permits were granted, and 3 percent more new homes were completed. 

Incomes up on the whole

Incomes of goods producers increased. The primary reason for this was the higher revenue for natural gas in mineral extraction. But construction, manufacturing and the public utilities also made more profits. These producers benefited from a more favourable  purchasing/selling prices ratio. Furthermore, labour costs grew more slowly than the production value. 

Production and income, 2005

Production and income, 2005

Higher income for mineral extraction

In spite of their smaller production, companies in mineral extraction realised substantially higher income levels in 2005. In mineral extraction selling prices were on average 29 percent higher than in 2004, purchasing prices rose by an average of 10 percent. The result was that income from natural gas and petroleum rose by nearly 40 percent.

Nico van Stokrom and Ron van der Wal