Unprecedented decline in household consumption in April

As indicated by the CBS Household Consumption Radar, the circumstances for consumer spending in June are more unfavourable than they were in April.

Consumption figures have been adjusted for year-on-year price changes and differences in the shopping-day pattern.

Lower spending on services and durable goods in particular

In April, consumers spent 24.6 percent less on services than in the same month last year. Services include visits to restaurants, hairdressers, theatres, gyms and football games as well as public transportation. Consumer spending on durable goods dropped by 14.8 percent. Purchasing of clothing, footwear and passenger cars declined in particular. On the other hand, they spent more on electrical appliances and home furnishings compared to April 2019.

Spending on food, beverages and tobacco was 3.6 percent up year-on-year. Consumer spending on other goods, such as natural gas and motor fuels, was 10.7 percent lower than one year previously. This was mainly on account of a much lower consumption of motor fuels.

Three weeks ago, CBS reported a year-on-year decline of 1.5 percent in retail turnover over April 2020. The volume of sales was down by 3.5 percent. The food sector achieved higher turnover, against a turnover decline in the non-food sector. These figures as well were adjusted for the shopping-day pattern.

Conditions more unfavourable in June

Every month, CBS publishes indicators to show developments around household consumption in the CBS Household Consumption Radar. Household consumption is influenced by factors such as consumers’ expectations, their personal financial situation and developments on the labour market. Although the Radar indicators show a strong correlation with household consumption, improved circumstances are not necessarily translated into increased growth.

According to the CBS Household Consumption Radar, circumstances for household consumption in June are more unfavourable than in April. This is mainly due to the more negative mood among Dutch manufacturers regarding future employment growth within the company, as well as a significant trend reversal for the active labour force from positive to negative growth.

This is the single largest decline in household consumption CBS has ever recorded. CBS has reported figures on household consumption as of 1922, except over the period 1940-1948. The current monthly time series has been available from 2000 onwards. Data on previous years are quarterly and/or annual. Quarterly and annual figures over the period up to 1995 were not compiled in accordance with the European System of Accounts 2010 (ESA 2010), the current European standard for the national accounts. Furthermore, household consumption data from before 1969 were limited to national consumption, which is slightly different from domestic household consumption: the former refers to spending by Dutch consumers both in the Netherlands and abroad, whereas the latter refers to spending within the Netherlands by both domestic and foreign consumers.