Investments growing fast

11/09/2007 15:00

Over the last 18 months investment spending on fixed capital formation rose fast, particularly in computers, machinery and installations. In 2006 the volume of the investments was up by 7.2 percent on the previous year. But with 6.7 percent the growth rate in the first six months of 2007 was also substantial.

Investments by type of asset

Investments by type of asset

More investments, more production

The robust growth in investments contributes to Dutch economic growth. Industrial entrepreneurs tend to invest more when the degree of capacity utilisation is high and their confidence rises. The degree of capacity utilisation has been rising for 18 months, but it has not yet reached the peak it had during the previous economic boom in the late nineties. Producer confidence has been robust since the summer of 2006.

Share of assets in total investments, 2006

Share of assets in total investments, 2006

Half of the investment is spent on buildings

In 2006 105 billion euro was spent on fixed capital formation in the Netherlands. About half of this went to dwellings and commercial buildings. The rest was spent among others on infrastructure, machinery, installations, means of transport, computers and software.

Largest increase in investments by businesses

In 2006 the private sector invested 88 billion euro. Public investment spending amounted to 17 billion euro and consisted mainly of infrastructure.
Private sector investments have grown faster than public sector investments since the start of 2006. In public sector investments the stimulus created by the great infrastructural projects at the start of the millennium, such as the high speed rail link and the Betuwelijn has waned.

Fixed capital formation in the Netherlands and the eurozone

Fixed capital formation in the Netherlands and the eurozone

Substantial growth rate within the European context

In the second quarter of 2007 the Netherlands had a 4.8 percent growth rate in investments, which roughly equals the eurozone average. Previously the growth rate had been well above the average for a year. During the last few quarters investments have also grown fast in Germany, Spain and Slovenia. In Slovenia the first quarter growth rate in 2007 even exceeded 20 percent. In France and especially in Italy, on the other hand, investments have been below the eurozone average for several quarters.

Karin van der Ven