According to preliminary estimates by Statistics Netherlands, Dutch economic growth was 2.5 percent in the first quarter of 2007 compared with the same quarter last year. This growth was realised with one working day fewer than the first quarter of 2006. Both household consumption and exports grew more slowly in the first quarter of 2007 than in 2006. This was mainly caused by the sharp drop in gas consumption. The increase in fixed capital formation was larger, on the other hand.
Construction and manufacturing are going through very productive times. These sectors had the largest production growth for years. The production of natural gas fell sharply in the first quarter of 2007, however.
Quarter-on-quarter growth 0.6 percent
Compared with the previous quarter, the economy grew by 0.6 percent in the first quarter of 2007 after correction for working day and seasonal effects. The quarter-on-quarter growth rate is in line with the growth rate in the seven preceding quarters.
Exports grow more slowly
In the first quarter of 2007 the volume of goods exports was 6.3 percent larger than in the first quarter of 2006. This increase is slightly smaller than in 2006. The main reason for the slowdown was the lower exports of gas. Re-exports did rise substantially again.
At 7.2 percent, imports grew by more than exports. This rise is partly connected with the rise in fixed capital formation and the robust growth in spending on durable consumer goods.
Lower gas use tempers consumption growth
Households spent 1.2 percent more in the first quarter of 2007 than in the same quarter last year. This is only half the average growth in 2006. The main reason for this is the substantially smaller amount of gas consumers used because of the mild winter. Households did spend more on durable consumer goods such as clothes, home furnishing and consumer electronics.
The volume of government consumption was 1.1 percent higher. Real expenditure on care rose, that on public administration was lower.
Investment in machines and buildings picks up strongly
Investment spending was 9.6 percent higher in the first quarter of this year. This is substantially higher than the 6.7 percent increase in 2006. Spending on machines and computers rose strongly, but more was also invested in construction works (dwellings, office buildings, infrastructure).
Sturdy growth for construction and manufacturing
Production growth in the first quarter differed strongly between the sectors of industry. Production of natural gas was one quarter lower because of lower sales at home and abroad. Construction benefited from the mild winter and the increased demand for products in this sector. The construction industry realised the highest production growth for seven years: 7.4 percent.
The manufacturing industry is flourishing with a production growth of nearly 5 percent, a level that has not been realised since 2000. The metal industry in particular is doing very well. Commercial services also have a lot of work on their hands, especially trade, business services and temp agencies. Production growth was more modest in non-commercial services and agriculture.