Economic situation deteriorates, mood more optimistic

The economic situation at the end of August was worse than at the end of July. This is mainly due to the slumping economy, the downturn in investments and a substantial reduction in the number of jobs. The heart of the indicators in the Business Cycle Tracer is firmly located in the recession stage. All indicators are currently below the level of their long-term average, but the mood indicators show signs of improvement.

The Dutch economy contracted by 5.1 percent in the second quarter compared to the same period one year previously. The contraction was even larger than in the first quarter. The second quarter had one working day less than one year previously. Compared to the first quarter the economy shrank by 0.9 percent, taking calendar and seasonal effects into account.

The mood among Dutch consumers and manufacturers improved substantially. In August, manufacturers were considerably less pessimistic about their future output. Providers of business services were less negative than in July.

In July 2009, capital market interest averaged 3.8 percent, i.e. 0.2 percentage points lower than in June. Dutch inflation was 0.2 percent in July, as against 1.4 percent in June. Lower energy prices accounted for the drop. Selling prices in manufacturing industry were 15 percent down on July 2008.

In the period May–July 2009, seasonally adjusted unemployment stood at 371 thousand. Compared to the period April-June, unemployment remained stable. The number of jobs in the second quarter was down by 93 thousand on one year previously. At the end of June there were 127 thousand unfilled vacancies, 25 thousand less than at the end of March. The number of hours worked in temp jobs dropped considerably in the second quarter of 2009 relative to the first quarter.

Gross domestic product (GDP)