Modest consumption growth in May

20/07/2007 15:00

Household spending was 1.2 percent higher in May 2007 than in May 2006. Dutch consumers spent 2.2 percent more on services, while expenditure on goods hardly changed compared to May 2006. Figures have been adjusted for price changes and differences in the number of shopping days.

Households spent a modest 0.5 percent more on durable consumer goods than in the same month one year previously. This is the lowest growth rate in almost two years. In the first four months of 2007, the growth was substantial, however. In this period, the highest increase was observed in spending on consumer electronics, clothes and shoes. In May, households spent far less on shoes and clothing than one year previously. Apart from the strong increase in preceding months, the level of spending in May 2006 was relatively high. This influenced the growth rate in May as well. In May 2006, clothing and shoes sold particularly well.

Consumption growth in the first five months of 2007 is lower than the average growth in 2006. This is mainly accounted for by low energy consumption. Because of the relatively mild weather conditions, households used less gas for heating. In May, gas consumption was down as well. The effect of gas consumption on consumer spending gradually diminishes, as the demand is always lower in the spring.

According to the National Accounts, Dutch households had a lot more to spend in 2006. Real disposable household income rose by 3.7 percent. The position of employees in particular improved, with more jobs and higher wages. Self-employed men and women also performed better. For households, a couple of lean years preceded the improvement in purchasing power in 2006.

Domestic household consumption (volume)

Domestic household consumption (volume)