Dutch consumption growth above European average

18/12/2006 13:48

In the first three quarters of 2006, Dutch households spent 2.4 percent more on goods and services than in the same period one year previously. This is a large increase compared with the modest growth in preceding years. Consumption growth is high in an international perspective as well. The increase measured in 2006 is still above the average consumption growth in the European Union (EU-25). However, of all 25 member states the Baltic states account for the strongest increase in consumption expenditure.

Consumption growth in the Netherlands differs from EU growth

Households in the European Union spent on average 2.0 percent more on goods and services in the first three quarters of 2006 than in the same period of 2005. The increase in consumption was larger than this in the Netherlands. Dutch households spent 2.4 percent more than in the first three quarters of 2005.

In the years 2001-2005 consumption growth in the European Union was 1.5 to 2 percent per year, according to figures from Eurostat, the European statistical bureau. Dutch growth rates lagged far behind. Consumption expenditure in the Netherlands rose by an average 0.5 percent a year in this period.

However, in the Netherlands consumption showed a strong recovery in the course of 2005. At the end of 2005 the growth rate surpassed the European average for the first time since the start of 2002. In the first half of 2006, too, the consumption increase was higher in the Netherlands than on average in the EU-25. The growth rate fell subsequently. In the third quarter the Dutch increase almost equalled the European average.

Consumption expenditure in the Netherlands and EU-25

% volume changes year-on-year

Consumption expenditure in the Netherlands and EU-25

The Dutch spend more on durable consumer goods

The slight setback in Dutch consumption growth in the third quarter of 2006 is accounted for by a slightly less exuberant growth in spending on durable goods. However, the increase in spending on goods such as furniture, clothing, cars and tv-sets remained strong. In the first three quarters of 2006, Dutch households spent 7 percent more on durable goods than in the same period of 2005. Such robust growth rates have not occurred since the period of high economic growth in the late nineties. Influenced by the state of the economy, spending on durable consumer goods can fluctuate sharply.

In addition to spending on durable goods, spending on food, drink and tobacco also grew strongly: Dutch households spent 3 percent more on this category of goods in the first three quarters of 2006 compared with the same period in 2005. In the preceding years spending on food rose by less than 1 percent. The growth rate of spending on services fell slightly. About half of consumption expenditure is accounted for by services. For example: housing, public transport, telephone, hairdressers and physiotherapy.

Dutch consumption expenditure

% volume changes year-on-year

Strong rise in consumption growth in new EU states

Although the increase in consumption is relatively high again in the Netherlands in 2006, it lags far behind that in a number of new EU member states. Consumer spending has increased in the Baltic states (Estonia, Latvia and Lithuania) in particular. Households in these countries spent about 15 percent more an goods and services in the first half of 2006 than in the first half of 2005.

Along with the Netherlands, Italy and Germany were the countries in the EU with the lowest rate of consumption growth. In Italy just as in the Netherlands, consumption growth picked up again in the first half of 2006. However, the growth there is still below the EU average. In Germany consumption growth was very moderate just as in previous years. In the first three quarters of 2006 German households spent 0.6 percent more than one year previously.