Economic growth in spite of declining natural gas production

14/08/2015 15:00

Statistics Netherlands (CBS) reports that the Dutch economy grew by 0.1 percent in Q2 2015 relative to Q1. The growth figure is based on a first estimate using currently available data. Exports, investments and household consumption contributed in a positive manner, but the growth figure was pushed down when the volume of natural gas extracted in the Netherlands was reduced substantially. The Dutch government scaled down natural gas extraction to reduce the risk of earthquakes in the province of Groningen. As a result, the export of natural gas decreased and the import increased.

As CBS reported several weeks ago, the underlying picture of the Dutch economy remains positive. Currently, the economy is almost back at the level prior to the recession, which started in the latter half of 2008.

GDP

The rest of the news release deals with year-on-year comparisons

Year-on-year economic growth 1.6 percent

According to the first estimate, economic growth in the Netherlands was 1.6 percent up in Q2 from the same period last year. Exports, investments and household consumption accounted for the economic growth. The shift from gas extraction to import of natural gas had a downward effect on economic growth in Q2 2015 of approximately 0.5 percentage points.

Expenditure, 2015-II

More petroleum derivatives and transport equipment exported; natural gas exports dramatically down

Exports of products manufactured in the Netherlands grew at nearly the same rate in Q2 as re-exports (exports of previously imported products). The volume of petroleum derivatives and transport vehicles exported by the Netherlands was distinctly higher than in Q2 2014, but the volume of natural gas exports was significantly smaller. The Netherlands also exported more services.

Imports of goods and services grew more rapidly than exports. Dutch import of natural gas, for example, increased substantially. This had a negative effect on the trade balance.

More invested in residential property and transport vehicles

Investments in residential property were significantly higher in Q2 than in the same period in 2014. Investments in transport vehicles - mainly lorries and semitrailers, etc - were also considerably higher.
Companies and institutions also invested more in machinery and installations, telecommunication and software. Manufacturers are positive about their future output. At the start of Q3, the capacity utilisation rate of manufacturing industry was at its highest level since the onset of the recession at the end of 2008. The mood among manufacturers is also more positive at the beginning of Q3 than at the beginning of Q2.

Consumers spend more on home furnishing articles and electrical appliances

Consumer spending was again higher in Q2 than in the same quarter of 2014. This is consistent with the modest improvement of employment also reported by CBS today and the recovery of the housing market. Consumer confidence also improved further in Q2 and in June the indicator was at the highest level in almost 8 years.

Dutch consumers spent more on furniture and electrical appliances. In Q2 more houses were sold than in the same quarter last year. Households also used more natural gas than last year and spent more on food. They also spent more on services, like house rent, public transport, visits to restaurants or hairdressers and insurance premiums. Spending on services accounts for more than half of total domestic consumer spending.

Output mineral extraction sector considerably down, substantial growth output construction sector

Output realised by the sector mineral extraction shrank notably. Output generated by the agricultural sector (especially horticulture) and the public sector also shrank. In the other sectors, output was up from one year previously.

The sectors construction and business services accounted for the best output results. The construction sector reaped the benefits from the recovering housing market. In the sector business services, temp agencies performed well. This is reflected in the employment figures CBS will publish today: again, the number of temp jobs has risen considerably.

Value added by sector, 2015-II

First estimate

The first estimate - 45 days after the end of each quarter - is solely based on information available at the time. After the publication of the first estimate, new information about the state of the Dutch economy is continually pouring in and is used to revise and update previous calculations. The second estimate will be published on Wednesday 23 September. In absolute terms, the adjustment of the second estimate relative to the first estimate averaged 0.1 percentage points over the past half decade. The two extremes ranged between –0.3 and +0.4 percentage points.

When a new calculation is published, CBS also publishes new, seasonally adjusted figures for quarters published earlier. The recalculation did not lead to adjustment of the data for the four preceding quarters.