Substantial decline in household consumption

20/12/2012 09:30

In October 2012, household spending on goods and services was 2.4 percent down from October 2011, the most substantial decline in the past three years. In the Netherlands, the high VAT (value added tax) rate was increased from 19 to 21 percent, effective from 1 October 2012. Spending on durable consumer goods dropped most notably. Consumption figures have been adjusted for price changes and differences in the shopping-day pattern.

Spending on durable consumer goods was more than 10 percent down from October 2011. Spending on cars fell by more than 30 percent. Spending on durable consumer goods was 0.2 percent lower in September than twelve months previously, i.e. the smallest decrease so far in 2012. Possibly, Dutch consumers bought more durable items in September to avoid having to pay higher prices in October.

Spending on food, drinks and tobacco was approximately at the same level in October 2012 as in October 2011. Household spending on other goods (e.g. energy and motor fuels) fell by 2.2 percent. Spending on services was 0.2 percent down.

The Household Consumption Radar shows the conditions for household consumption. These conditions improved marginally in December.

Domestic household consumption (volume, adjusted for shopping-days)

Domestic household consumption (volume, adjusted for shopping-days)

More figures can be found in dossier Business cycle.

For more information on economic indicators, the reader is referred to the Economic Monitor.