Economic situation improves considerably

29/05/2015 15:00

According to Statistics Netherlands’ Business Cycle Tracer, the economic situation improved considerably in May 2015  relative to April. In the period between summer 2013 and spring 2014, the economy improved continually, but since then the recovery process evolved more gradually. In May the recovery process is accelerating.

Statistics Netherlands’ Business Cycle Tracer is a tool used to monitor the economic situation and economic developments. The Business Cycle Tracer uses a selection of fifteen key macro-economic indicators, which – together – provide a coherent picture of the state of the economy during the past month or quarter.

Business cycle tracer indicator (unweighted average of the 15 indicators in the Business Cycle Tracer)

Mood among producers and consumers improves further

The mood among Dutch manufacturers has improved further in May and reached the highest level in more than four years. Dutch manufacturers are far more positive about their order books. They were also somewhat more optimistic about their future output.

The mood among consumers is back at the level of March. Optimists outnumber pessimists. In March, Dutch consumers were positive for the first time since the summer of 2007. Willingness-to-buy is less negative in May than it was in April. Consumers’ opinions about the economic climate hardly changed. Producer and consumer confidence are both far above the level of their long-term average.

Consumer and producer confidence (seasonally adjusted)

Investments, household consumption and exports up

he volume of investments in tangible fixed assets has grown considerably and was more than 14 percent higher than in March 2014. Just as in the preceding months, residential property investments have increased. Investments in infrastructural projects also increased. 
Additionally, there was a substantial rise in investments in machinery and installations. The capacity utilisation in manufacturing industry at the beginning of the second quarter was at its highest level since the onset of the crisis in 2008. Just as in the preceding two months, investments in road transport, e.g. lorries and semitrailers were above the level of one year previously.

Dutch consumer spending on goods and services was up by nearly 2 percent in March 2015 compared to the same month last year. Just as in the previous 2 months, temperatures were low in March 2015 compared to March 2014 and consumers again used more natural gas. Households also spent more on durable goods, in particular household appliances and home furnishing articles. This is in line with the recovery of the housing market. They also spent more on food, drinks and tobacco products.

Dutch consumers spent more on services like house rent, public transport, restaurants, hairdressers and insurance premiums. Spending on services accounts for more than half of total domestic consumer spending.

Exports of goods grew very moderately in March. The volume of exports of goods was more than 1 percent up from twelve months previously. The increase is considerably smaller than in the two previous months. Exports of petroleum derivatives, rubber and plastic products were noticeably higher in March.

Manufacturing output up again

The average daily output generated by Dutch manufacturing industry was 1.6 percent higher in March 2015 than in March 2014. This is the first increase after five months of decline. Manufacturing output still suffered the effects from a major closedown in the tobacco industry. If this is not taken into account, manufacturing output would be even higher than one year previously.

Recovery labour market slows down

The recovery of the Dutch labour market continued in the first quarter of 2015, although somewhat slower. The number of jobs increased by 6 thousand, reaching 9.8 million. Just like in the past quarters, the number of temp jobs grew significantly.

The number of jobs increased for the 4th quarter in a row. Altogether in this period, 65 thousand new jobs were created, but in the preceding 9 quarters, 200 thousand jobs were lost. As a result, the total number of jobs is still below the level recorded at the end of 2011. 

By the end of March, there were 125 unfilled job vacancies in the Netherlands, i.e. 6 thousand more than at the end of the last quarter of 2014. The number of job vacancies has been on the increase for 7 quarters, but is only half of the record numbers during the boom period in 2007 and 2008.

The number of unemployed declined further in April. Unemployment fell by an average of 7 thousand a month over the past three months. The unemployment rate in the Netherlands was 7.0 percent. In the first quarter of 2015, there were 5 unemployed for every job vacancy.

The economy is improving and young people appear to benefit most from the recovery of the labour market. In the past 12 months, the unemployment rate fell most rapidly among 15 to 24-year-olds, from 13.2 to 10.9 percent. The unemployment rate in the labour force among 25 to 44-year-olds fell less rapidly and it was stable among over-45s. The age category over-45 included many long-term employed.

The total amount of hours worked in temp jobs has increased since the beginning of 2013. In the first quarter of this year, the number of long-term temporary employment contracts (secondment and payrolling) and short-term employment contracts increased, though less rapidly than in the fourth quarter of 2014. In the first quarter of 2015, more than 225 thousand temp workers were active on the Dutch labour market.

In April, the number of bankruptcies in the private sector was at its lowest level since May 2011.The number of bankruptcies has fallen noticeably after a peak in mid-2013. Compared to the pre-crisis period, the number of bankruptcies in the private sector is still relatively high.

Gross Domestic Product (volume, seasonally adjusted)

Contributions to Dutch economic growth are widening

It was for the fourth quarter in a row that the Dutch economy grew during the first quarter of 2015. The growth rate was 0.4 percent on the previous quarter according to the first calculations of the currently available data.

Contributions to Dutch economic growth are widening: investments, consumption and the balance of exports and imports all contribute positively. Dutch economy is still 1 percent below the level recorded during the period of economic boom in the first six months of 2008.
The Dutch economy was up 2.4 percent on the first quarter of 2014.

More figures can be found in the Business cycle dossier.

For more information on economic indicators, see the Economic Monitor.