Dutch economy grows by 2.8 percent in the second quarter of 2006

28/09/2006 09:30

In the second quarter of 2006, economic growth in the Netherlands reached 2.8 percent. The growth of the Dutch gross domestic product (GDP) was achieved with one working day less than in 2005.

The second estimate of the economic growth in the second quarter is up by 0.4 percent points on the first estimate, which was on 10 August. This is according to the latest figures by Statistics Netherlands.

Exports made the greatest contribution to economic growth. Furthermore domestic spending is clearly recovering. Households consumed more, and businesses invested more.

Upward adjustment of economic growth rate

Second quarter economic growth saw an upward adjustment of 0.4 percent points. This is because the production figures of industry, construction and care are higher than estimated earlier. Therefore, less was supplied from stock, and investments and government consumption are higher. 

Quarter-on-quarter growth at 1.2 percent

The volume of GDP in the second quarter was up by 1.2 percent on the first quarter of 2006. In the first estimate this was 1.0 percent. The quarter-on-quarter growth rate of 1.2 percent in the second quarter is the highest in over two years. 

Increased growth in all expenditure categories

The 2.8 percent economic growth in the second quarter of 2006 is virtually the same as in the first quarter. Compared to 2005 this means the growth rate almost doubled. The fastest increase is in household consumption. Especially the expenditure on durable consumer goods increased substantially.

The faster growth in exports refers to the exports of Dutch manufactured products. Still re-exports are still much higher than the exports of Dutch manufactured products.

Imports grew as much as exports. This is not only due to re-exports, but also largely because of the recovery of domestic expenditure and production.

Businesses invest more and more in machinery, computers and vans. There is also an increase in investments in housing. Care is responsible for extra government consumption. 

Production growth mainly in commercial services

In the second quarter of 2006, the production increased almost everywhere, but it increased most in commercial services. The top positions are taken by the temp agencies, wholesale trade and banks. Dutch retail trade benefited from the sharp increase in willingness to purchase by consumers. The goods producers contributed less. This is partly because of the effect of one working day less.

Production growth in industry and construction was positive but modest. In industry the production of chemicals and metal was up most. The production of the energy sector was lower, because less electricity was generated and less natural gas extracted. The growth in non-commercial services was mainly achieved by the care sector.