Dutch economic growth was 2.4 percent in the second quarter of 2006. The increase in the gross domestic product (GDP) was realised with one working day fewer than the same quarter last year. Employment also continued to rise: there were 80 thousand more jobs than last year, according to figures from Statistics Netherlands.
The increase in exports was slightly down in the second quarter. In spite of this, exports are still the main driving force behind economic growth. In addition household consumption picked up substantially, especially of durable consumer goods. This too was an important impulse for economic growth. Fixed capital formation was also up.
High quarter-on-quarter growth
After correction for working day and seasonal effects, the volume of GDP growth was 1.0 percent higher in the second quarter of 2006 than in the first quarter. This the highest quarter-on-quarter growth for more than two years.
Exports growth slightly down
The volume of exports of goods and services was 6.6 percent higher in the second quarter than one year previously. This meant exports rose by slightly less than in the first quarter of 2006, but still by more than in the year 2005. A large part of the increase is accounted for by re-exports: goods produced abroad, for example in China, Taiwan or the US, which are distributed via the Netherlands after undergoing very little further processing. In addition exports of Dutch products also showed a clear increase.
Imports grew nearly just as substantially as exports. The increase in imports was not only accounted for by re-exports, but also for an important part by increasing domestic expenditure and consumption.
More durable goods sold
Dutch households spent over 8 percent more on durable consumer goods in the second quarter than twelve months previously. They bought more clothes, furniture and consumer electronics in particular. Overall, households spent 2.8 percent more than in the same period last year, after corrections for price changes and changes in the new health care insurance system. This is the highest growth since 2000. The volume of government consumption was 1.2 percent higher .
More invested in machines and computers
Fixed capital formation was 2.6 percent higher in the second quarter of 2006 than in the same quarter in 2005. Companies invested substantially more in machines – the main investment category in the business sector - and computers in particular. Investments in dwellings and goods vehicles were also higher.
Production growth almost by commercial services alone
Nearly all of the increase in production in the second quarter was realised by commercial services. The leaders in this respect were the temp agencies, wholesalers and banks. Retailers benefited form the strong increase in consumer spending. Goods producers hardly contributed to production growth at all in this quarter. The growth in construction and in manufacturing was very modest, partly caused by the effect of one working day fewer. Production in the energy sector was lower, as less natural gas was extracted. In non-commercial services, the care sector also accounted for a small part of production growth.
Employment continues to rise
There were 80 thousand employee jobs more in the second quarter of 2006 than twelve months previously (1.1 percent). This growth is equal to that in the first quarter of 2006. In terms of full-time equivalents, growth is slightly lower (0.9 percent). The reason for this is the large proportion of part-time jobs in the growth sectors. After correction for seasonal effects, the number of jobs was 0.3 percent higher in the second quarter than in the first quarter of 2006. This, too, indicates that employment growth continues.