Economic outlook less negative in mid-August

© Hollandse Hoogte / Robin Utrecht
The economic situation according to the CBS Business Cycle Tracer has become less unfavourable in August. However, the economy is still firmly in the recession stage. Statistics Netherlands (CBS) reports that, as of mid-August, 10 out of the 13 indicators in the Business Cycle Tracer are positioned below their long-term trend. Measures against the spread of coronavirus have had a major impact on many indicators of the Tracer.

The CBS Business Cycle Tracer is a tool used to monitor the state and the course of the Dutch economy and is based on 13 key macro-economic indicators. Together, these provide a coherent macro-economic picture based on CBS figures which are being published over the past month or quarter. It does not necessarily represent the situation at the level of of individual households, businesses or regions.

Business Cycle Tracer indicator (unweighted average of the indicators in the CBS Business Cycle Tracer)
YearMonthcycle (distance to the long-term trend (=0))
2013January-0.92
2013February-1.04
2013March-1.12
2013April-1.17
2013May-1.25
2013June-1.27
2013July-1.28
2013August-1.27
2013September-1.21
2013October-1.13
2013November-1.06
2013December-0.98
2014January-0.92
2014February-0.87
2014March-0.84
2014April-0.83
2014May-0.81
2014June-0.8
2014July-0.79
2014August-0.77
2014September-0.76
2014October-0.74
2014November-0.71
2014December-0.67
2015January-0.63
2015February-0.58
2015March-0.53
2015April-0.48
2015May-0.43
2015June-0.38
2015July-0.34
2015August-0.3
2015September-0.26
2015October-0.26
2015November-0.24
2015December-0.23
2016January-0.23
2016February-0.22
2016March-0.21
2016April-0.2
2016May-0.15
2016June-0.12
2016July-0.09
2016August-0.03
2016September0.01
2016October0.05
2016November0.1
2016December0.14
2017January0.18
2017February0.24
2017March0.29
2017April0.33
2017May0.4
2017June0.43
2017July0.46
2017August0.53
2017September0.57
2017October0.61
2017November0.66
2017December0.71
2018January0.76
2018February0.81
2018March0.85
2018April0.86
2018May0.91
2018June0.9
2018July0.92
2018August0.93
2018September0.93
2018October0.9
2018November0.88
2018December0.85
2019January0.79
2019February0.77
2019March0.72
2019April0.7
2019May0.71
2019June0.67
2019July0.69
2019August0.67
2019September0.64
2019October0.6
2019November0.56
2019December0.56
2020January0.56
2020February0.54
2020March0.5
2020April0.5
2020May-1.1
2020June-2.09
2020July-1.68
2020August-1.65

Both consumer and producer confidence less negative

In July, confidence among both consumers and producers improved compared to the previous month. Both are positioned below their long-term averages.

Consumer and producer confidence (seasonally adjusted)
YearMonthConsumer confidence (average of the component questions)Producer confidence (average of the component questions)
2016January113.2
2016February73.1
2016March23.9
2016April64.7
2016May74.4
2016June115.4
2016July95.1
2016August91.2
2016September123.4
2016October174.3
2016November213.4
2016December214.7
2017January216
2017February227
2017March247.8
2017April268.3
2017May236.1
2017June237.2
2017July256.6
2017August265.4
2017September238.5
2017October238.2
2017November229.1
2017December258.9
2018January2410.3
2018February2310.9
2018March249.5
2018April258.2
2018May239.8
2018June237.7
2018July236.3
2018August215.9
2018September195.7
2018October155.9
2018November137.2
2018December97.5
2019January05.8
2019February-26.3
2019March-46.1
2019April-36.7
2019May-34.7
2019June03.3
2019July 23.9
2019August03.9
2019September-23.3
2019October-13.6
2019November-22.8
2019December-22.9
2020January-32.5
2020February-23.7
2020March-20.2
2020April-22-28.7
2020May-31-25.1
2020June-27-15.1
2020July-26-8.7

Household consumption, investments and exports down

In Q2 2020, Dutch consumers spent 11.8 percent less than one year previously. In Q2, consumers mainly spent less on services (accommodation and food services, recreation and culture, transport and communication and care). They also spent less on clothing, cars and motor fuels. On the other hand, they spent more on food, electrical appliances and home furnishings than one year previously.

In Q2 2020, the volume of investments in fixed assets was 10.7 percent down on the same quarter last year. Investments in transport equipment such as passenger cars, lorries and semi-trailers declined in particular. Moreover, investments in dwellings, office buildings and machinery were significantly lower than one year previously. Only investments in computer equipment were higher.

Exports of goods and services were 10.9 percent lower than in Q2 2019. In the previous quarter, exports still grew by 2 percent. The year-on-year decline was particularly large in the export of services (e.g. spending by international visitors within the Netherlands), transport equipment, petroleum products and machinery . Domestic exports contracted somewhat more sharply than re-exports (exports of previously imported products).

Manufacturing output almost 10 percent down in June

In June 2020, the average daily output generated by the Dutch manufacturing industry was 9.7 percent down on June 2019. The year-on-year decrease is somewhat smaller than in the previous two months.

Fewer bankruptcies in July

Adjusted for court session days, there were 27 fewer corporate bankruptcies in July than in the previous month.

House prices 7.6 percent higher in June

In June 2020, prices of owner-occupied dwellings (excluding new constructions) were on average 7.6 percent higher than in the same month last year. This price increase is more or less the same as in the previous month.

Significant drop in number of hours worked

Due to government support measures, job losses were still relatively limited in Q2 at -3.0 percent, but the number of hours worked by employees and self-employed fell significantly and ended at a total of 3.2 billion hours in Q2 2020. Adjusted for seasonal effects, this is 6.1 percent lower than one quarter previously.

At the end of June, the number of unfilled job vacancies stood at 200 thousand. This was down by 26 thousand on the previous quarter, when the decline stood at 60 thousand. In a span of six months, the number of vacancies therefore declined by 30 percent, but is still above its long-term average of approximately 165 thousand.

In Q2 2020, there were 349 thousand unemployed people (unemployment according to the ILO definition), i.e. 72 thousand more than in Q1. As a result, the unemployment rate rose from 3.0 percent in Q1 to 3.8 percent in Q2, the strongest increase in both the number of unemployed and the unemployment rate since quarterly data were first reported over 2003.

In Q1 2020, turnover of temporary employment agencies fell by 1.5 percent. This was the first decline since Q2 2016. Relative to one year previously, turnover was down by 1.0 percent.

GDP (volume), seasonally adjusted
YearQuarterIndex (2010=100)
2013Quarter 1100.1
2013Quarter 299.9
2013Quarter 3100.5
2013Quarter 4101.1
2014Quarter 1101
2014Quarter 2101.6
2014Quarter 3101.9
2014Quarter 4102.8
2015Quarter 1103.4
2015Quarter 2103.7
2015Quarter 3104.1
2015Quarter 4104.1
2016Quarter 1105.1
2016Quarter 2105.3
2016Quarter 3106.5
2016Quarter 4107.4
2017Quarter 1107.9
2017Quarter 2108.9
2017Quarter 3109.7
2017Quarter 4110.5
2018Quarter 1111.1
2018Quarter 2111.7
2018Quarter 3112
2018Quarter 4112.4
2019Quarter 1113
2019Quarter 2113.4
2019Quarter 3113.8
2019Quarter 4114.3
2020Quarter 1112.6
2020Quarter 2103

8.5 percent GDP contraction in Q2

According to the first estimate of GDP conducted by CBS, gross domestic product (GDP) contracted by 8.5 percent in Q2 2020 relative to the previous quarter. The decline was mainly due to falling household consumption, while investments and the trade balance also fell significantly. Relative to one year previously, GDP contracted by 9.3 percent.

On Wednesday 23 September 2020, CBS will publish the second estimate of GDP and employment over Q2 2020.

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