Disposable household income further down

  • Disposable household income 0.4 percent down from 2010
  • Smallest increase mortgage debt since 1995
  • Higher profits in private sector

The disposable household income has dropped for the fourth year in a row. Adjusted for inflation, the disposable household income dropped 0.4 percent in 2011, the same as in 2010 and this was largely caused by the fact that the wage increase of 1.8 percent was below the level of inflation (2.3 percent). Higher contributions to health care insurance schemes and pension schemes also had a negative effect on the disposable household income. As household incomes declined, consumer expenditure dropped by 1.1 percent.

The total financial capital of households rose by 52 billion euro last year and for the first time in history the 1 trillion euro barrier was broken. This includes the capital owned by pension funds and life insurance companies. The value of shares owned by Dutch households was reduced by 27 billion euro due to purchases and falling share prices. The investment portfolios held by pension funds and life insurance companies, on the other hand, increased by 77 billion euro. At the same time, the total mortgage debt increased by 13 billion euro to a total of 665 billion euro, which is the lowest increase since 1995. This is due to stagnation on the housing market.

Net profits generated by non-financial companies grew by 3.0 billion euro to 113 billion euro last year. Despite higher profits, the non-financial sector is as yet not back at the level prior to the economic crisis. The profits in 2011 are largely due to achievements on the domestic market. Results achieved with domestic production activities rose by 5.8 billion euro to 87 billion euro. Profits generated by foreign subsidiary companies were reduced by 3.9 billion euro to 39 billion euro.

Net profits realised by financial institutions also rose in 2011, by 4.7 billion euro. Profits made by financial institutions are predominantly attributable to foreign subsidiary companies. Profits made by Dutch banks (including their foreign subsidiaries) were 8.8 billion euro higher, i.e. 0.4 billion more than in 2010. Profits earned by insurance companies and pension funds also rose by 0.4 billion euro, to 5.1 billion euro. Other financial institutions like investment companies and financial holdings increased theirs profits by 3.8 billion euro to 11.0 billion euro.