According to Statistics Netherlands’ first estimate, the Dutch economy grew by 2.9 percent in 2006. This is nearly twice the growth in 2005. Just as in 2005 exports contributed most to the increase. It was consumption by households and fixed capital formation, however, which boosted the growth rate.
The number of jobs was 100 thousand higher than in 2005. This 1.4 percent increase follows three years of decreasing employment.
Fourth quarter growth 2.7 percent
The economy grew by 2.7 percent in the fourth quarter of 2006. The last quarter of 2006 had one working day fewer than the last quarter of 2005. Exports and fixed capital formation picked up particularly in the fourth quarter, household consumption rose slightly more slowly than in preceding quarters.
On the basis of new information economic growth in the first three quarters of 2006 has been adjusted upwards by 0.1 percent on average.
Quarter-on-quarter growth 0.6 percent
Compared with the previous quarter, the economy grew by 0.6 percent in the fourth quarter of 2006. This is after correction for working day and seasonal effects. This quarter-on-quarter growth is almost equal to the average in the first three quarters of 2006.
Exports growing faster
The volume of exports of goods and services was 7.5 percent higher in 2006 than in 2005. The increase in re-exports was again higher than that of exports of Dutch products, although it was the exports of Dutch products that boosted the increase in exports.
Imports grew slightly more strongly than exports. The increase in imports is not only caused by re-exports but to an important extent also by the increase in investment and consumption of consumer durables.
Substantial rise in household consumption
After correction for price changes and changes in the health insurance system, households spent 2.4 percent more last year than in 2005. The increase is considerably larger than in the years 2001 to 2005. It was pushed up mainly by spending on durable goods which rose by more than 6 percent in 2006.
The volume of government consumption was 1.3 percent higher last year than in 2005. Real expenditure on care rose, that on public administration did not.
Investments pick up
In 2006, 6.1 percent more was invested than in 2005. More was invested in machines in particular, the main private sector investment category, but businesses also spent more on company cars and computers. Investment in dwellings and infrastructure was also clearly higher.
Higher production for commercial services and construction
Production rose in most sectors of industry in 2006, but most especially in commercial services and construction. Within commercial services the increase was largest for temp agencies, wholesalers, architects’ and engineering bureaux and banking. The retail sector also grew sturdily as consumers were more willing to spend their money. The construction industry benefited from the higher investment activity.
In manufacturing, too, production growth picked up, partly because of a growth spurt in the fourth quarter. Production in the energy sector was lower, however. In combination with higher imports less electricity was generated and less natural gas extracted. The increase in non-commercial services was modest. The care sector continued to grow, while public administration fell slightly.
Employment increase speeding up
There were 105 thousand more jobs for employees in 2006 than in 2005. Employment grew increasing strongly in the course of 2006. In the fourth quarter there were 149 thousand more jobs than in the fourth quarter of 2005.After correction for seasonal effects the number of jobs in the fourth quarter was 0.7 percent higher than in the third quarter of 2006. This, too, shows that the increase in employment is speeding up.