Modest recovery economy in fourth quarter 2009

12/02/2010 15:00
  • Quarter-on-quarter growth 0.3 percent
  • Economy shrinks by 2.2 percent relative to one year previously
  • Decline exports slows down considerably
  • Cutback in household spending and investments
  • Nearly 150 thousand jobs lost
  • Unprecedented economic downturn of 4 percent in 2009

According to the first, provisional estimate conducted by Statistics Netherlands, Dutch economy shrank by 2.2 percent in the fourth quarter of 2009 relative to the same quarter one year previously. The downturn is less serious than in the preceding three quarters. The economy improved 0.3 percent compared to the third quarter. Employment was nearly 150 thousand jobs down on one year ago, but the rate of decline is slowing down.

Over the entire year 2009, an unprecedented negative growth by 4 percent was recorded.

Quarter-on-quarter growth 0.3 percent

Adjusted for the number of working days and seasonal variation, the Dutch economy improved by 0.3 percent in the fourth quarter of 2009 versus the prior quarter. The fourth quarter of 2009 had one extra working day compared to the fourth quarter of 2008. For the second consecutive quarter, quarter-on-quarter growth is positive after four quarters of negative growth, but quarter-on-quarter growth is less than in the third quarter, when – according to the current definition – the Netherlands climbed out of the recession.

Exports decline less dramatic than in third quarter

In the fourth quarter of 2009, the volume of exports of goods and services was 2.5 percent down on the same quarter in 2008. The decline is much less substantial than in the previous quarters. The relative improvements concerns exports of Dutch product as well as re-exports. Imports of goods and services were 5 percent lower than twelve months ago. Imports of durable consumer goods and investment goods were obviously lower.

Household consumption still at low level

Dutch household spending was 2.6 percent down in the fourth quarter on one year previously. The decline is virtually the same as in the first three quarters of 2009. Spending on durable goods, like home furnishing articles and consumer electronics plummeted. New car sales also dropped and spending in the sector hotels and restaurants was significantly lower.

The volume of government consumption was 3.1 percent higher in the fourth quarter than in the fourth quarter of 2008. Again, public spending was the sole category to show growth. Real spending on care and public administration increased markedly.

Dramatic decline investments  

In the fourth quarter investments plummeted by 14.3 percent versus one year previously. The decline is almost the same as in the two preceding two quarters. Investments in machinery and transport equipment, residential and non-residential building fell steeply. Still showing obvious growth over the first three quarters of 2009, investments in infrastructure decreased marginally in the fourth quarter. The national government often commissions infrastructure works.

Decline in manufacturing output slows down

In manufacturing industry, improved exports tempered output decline compared to prior quarters. The trade and transport sectors also benefited. In manufacturing industry, the production of chemical products was significantly higher than one year previously, when results were poor. The downturn in the construction sector, however, is continuing. This is mainly due to the fact that previously concluded contracts expired and new orders are not forthcoming. The downward trend in the sector business services continues.

Loss of jobs levels off

In the fourth quarter of last year, 147 thousand employee jobs were lost relative to the same quarter in 2008. With 1.8 percent, the decline is marginally higher than in the third quarter. Many temp jobs were lost. After adjustment for seasonal variation, employment in the fourth quarter is 0.2 percent down on the third quarter of 2009. The negative quarter-on-quarter growth is obviously less substantial than in the other quarters of 2009.

Economic downturn of historic proportions

Taking figures on the fourth quarter into account, the Dutch economy shrank by 4.0 percent over the entire year 2009. Statistics Netherlands has never measured an economic downturn of this magnitude in its entire history. The previous record dates back to 1931, when the decline was 3.6 percent. The most substantial economic slump after the Second World War was observed in 1982, when the economy declined by 1.2 percent. 

Minor adjustment

Economic growth over the first three quaters of 2009 was re-evaluated. The economic growth figure over the second quarter was adjusted downward by 0.1 percent.