economic situation improves again

31/07/2015 15:00

According to Statistics Netherlands’ Business Cycle Tracer, the economic situation improved considerably in July 2015 relative to June. In the period summer 2013-spring 2014, the Dutch economy improved continually, but subsequently, improvement occurred more gradually. Since May, the upward trend has picked up again. In July the positive trend continues.

Statistics Netherlands’ Business Cycle Tracer is a tool used to monitor the economic situation and economic developments. It uses fifteen key macro-economic indicators, which – together – provide a coherent picture of the state of the economy during the last month or quarter. In July, nearly all indicators in the Tracer are performing better than their long-term trend.

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

Mood among producers and consumers remains positive

Confidence among Dutch manufacturers fell marginally in July, but the mood remains positive. Optimism has prevailed among Dutch manufacturers since October 2014. Dutch manufacturers were less positive about their future output. They were also somewhat less optimistic about their order books.

At the start of the third quarter of 2015, the capacity utilisation rate in manufacturing industry exceeded 82 percent, the highest level percentage since the start of the economic crisis by the end of 2008.

Consumer confidence is also slightly less positive, because consumers are far less optimistic about the economic climate. Producer and consumer confidence are both way above the level of their long-term average.

Consumer and producer confidence (seasonally adjusted)

Exports, investment and household consumption up

The export of goods grew considerably in May. The volume of exports of goods was 7.5 percent up in May 2015 from twelve months previously. The growth is larger than in the previous month. Exports of machinery and equipment, petroleum derivatives and chemical products were noticeably higher in May.

Investment readiness also improved further. The volume of investments in tangible fixed assets was almost 7 percent up from May 2014. The increase is more substantial than in the preceding month, mainly due to higher investments in residential property. Investments in road transport (lorries and delivery vans) and telecommunications also increased.

Dutch consumer spending on goods and services was 1.1 percent up in May 2015 from the same month last year. Dutch consumers spent more on food, drinks and tobacco products. Household spending on durable goods was also higher. In May, too, consumers spent more on home furnishing articles and household appliances. They also used more natural gas than one year previously, but the increase is considerably smaller than in the preceding 4 months.

Dutch households spent more on services, e.g. house rent, public transport, visits to restaurants or hairdressers and insurance premiums. These services account for more than half of total domestic consumer spending.

Manufacturing output up again

The average daily output generated by the Dutch manufacturing industry in May 2015 was up from May 2014. Manufacturing output is still suffering from the effects of a major closedown in the tobacco industry. If this is not taken into account, output growth would have been even higher.

Downward trend bankruptcies

In June, the number of bankruptcies filed in the private sector reached the lowest level since since January 2009. The trend has been downwards since the summer of 2013.

Unemployment down, job market slowly recovering

The number of unemployed fell further in June. Unemployment declined by an average of 5 thousand a month during the past 3 months, resulting in an unemployment rate of 6.9 percent.

In the first quarter of 2015, the number of jobs remained stable compared to the previous quarter. In the 3 preceding quarters, the number of temp jobs had increased. As a result, the number of jobs was 72 thousand higher relative to the first quarter of 2014.

At the end of March, there were 125 thousand 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 increased for 7 quarters now, but the total number of vacancies is still only half of the record numbers realised during the boom period in 2007 and 2008.

The total number of hours worked in temp jobs has risen 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, albeit less rapidly than in the fourth quarter of 2014. In the first quarter of this year, 225 thousand temp workers were active on the Dutch labour market.

Gross Domestic Product (volume, seasonally adjusted)

Economic growth widely supported

The second estimate published on 24 June showed that the Dutch economy grew for the fourth quarter in a row in the first quarter of 2015. Quarter-on-quarter growth was 0.6 percent.

More and more signs indicate that the economy is improving: investments, consumption and exports all made a positive contribution, but the Dutch economy is still 0.2 percent below the level recorded during the boom period in the first six months of 2008.

Year-on-year economic growth was 2.5 percent in the first quarter of 2015.

Friday 14 August 2015, Statistics Netherlands will publish the first results of economic growth and the number of jobs in the second quarter of 2015.

More figures can be found in the Business cycle dossier.

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