Dutch economy: 2006 ends on a high note

16/01/2007 14:00

The Dutch economy was doing much better at the end of 2006 than at the close of 2004 and 2005. The indicators in the Business Cycle Tracer show a situation of high economic growth.

End of 2004: recession

The growth of the indicators in the Business Cycle Tracer is below the long-term average and has decreased. The heart of the scatter is in the red quadrant, the stage of economic recession.

Unusually, the confidence indicators for the manufacturing industry (producer confidence and orders received) are lagging in the Tracer. It is more usual for the confidence indicators to be leading in the business cycle, while a number of labour market indicators (unemployment and jobs) lag behind. It should be mentioned in this respect that at the end of 2004 the economy had started its recovery. process.

Business Cycle Tracer, December 2004-2006

Business Cycle Tracer, December 2004-2006

End of 2005: recovery

The heart of the indicator group is in the recovery stage (yellow quadrant) at the end of 2005. The growth of most indicators is still below the long-term average, but has increased. Producer confidence and orders received are at the top of the scatter. The indicator reflecting whether consumers think it is a good time to buy expensive durables has not changed position much from December 2004.

End of 2006: high economic growth

The heart of the scatter is in the stage of high economic growth (green quadrant) at the end of 2006. The growth rates are still increasing and are now higher than the long-term averages.  There is a noticeably substantial increase in the vacancies and jobs indicators.

Producer confidence and unemployment show most improvement

Compared with the end of December 2004, the situation at the end of December 2006 shows the largest improvements for the indicators producer confidence and unemployment. These indicators have made the biggest leap from low to high in the Tracer. Unemployment fell by 80 thousand people in this period and producer confidence in the manufacturing industry rose from just above zero to nearly 8. Manufacturing production, on the other hand, showed the smallest improvement.

Ben van Cleef

Source: Business Cycle Tracer