Economic outlook less negative in mid-October

© Hollandse Hoogte / Manon Bruininga
The economic situation according to the CBS Business Cycle Tracer has become less unfavourable in October. However, the economy is still firmly in the recession stage. Statistics Netherlands (CBS) reports that, as of mid-October, 10 out of the 13 indicators in the Business Cycle Tracer perform 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-1.03
2013March-1.12
2013April-1.18
2013May-1.24
2013June-1.27
2013July-1.27
2013August-1.27
2013September-1.21
2013October-1.14
2013November-1.06
2013December-0.98
2014January-0.91
2014February-0.86
2014March-0.83
2014April-0.82
2014May-0.8
2014June-0.8
2014July-0.78
2014August-0.77
2014September-0.76
2014October-0.74
2014November-0.72
2014December-0.68
2015January-0.64
2015February-0.59
2015March-0.53
2015April-0.48
2015May-0.42
2015June-0.37
2015July-0.33
2015August-0.29
2015September-0.26
2015October-0.25
2015November-0.23
2015December-0.22
2016January-0.22
2016February-0.2
2016March-0.19
2016April-0.18
2016May-0.14
2016June-0.11
2016July-0.08
2016August-0.03
2016September0.01
2016October0.05
2016November0.11
2016December0.15
2017January0.19
2017February0.25
2017March0.3
2017April0.34
2017May0.41
2017June0.44
2017July0.47
2017August0.53
2017September0.57
2017October0.61
2017November0.68
2017December0.72
2018January0.76
2018February0.82
2018March0.87
2018April0.88
2018May0.91
2018June0.92
2018July0.93
2018August0.94
2018September0.93
2018October0.91
2018November0.91
2018December0.89
2019January0.83
2019February0.81
2019March0.77
2019April0.74
2019May0.72
2019June0.69
2019July0.72
2019August0.68
2019September0.65
2019October0.63
2019November0.6
2019December0.6
2020January0.61
2020February0.61
2020March0.59
2020April0.56
2020May-0.54
2020June-1.52
2020July-1.95
2020August-1.86
2020September-1.45
2020October-1.21

Consumer confidence virtually unchanged and producer confidence less negative

In September, consumer confidence was more or less the same as in August. In addition, confidence among Dutch manufacturers was less unfavourable for the fifth consecutive month. Both producer and consumer confidence were 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
2020August-29-5.4
2020September-28-4.8

Household consumption, investments and exports down

In August 2020, the total volume of goods exports shrank by 2.3 percent year-on-year. Exports of petroleum products, transport equipment and metal products decreased in particular. Exports of machinery and appliances declined as well.

The volume of investments in tangible fixed assets was 4.5 percent down in July 2020 relative to the same month last year. This contraction is smaller than in the previous three months and mainly due to lower investments in buildings and machinery.

In July 2020 consumers spent 6.2 percent less than in July 2019. The decline is smaller than in the previous four months. Consumers again spent less on services but more on goods.

Manufacturing output 4 percent down in August

In August 2020, the average daily output generated by the Dutch manufacturing industry was 4.0 percent down on August 2019. The year-on-year decrease is smaller than in the previous four months.

Slightly more bankruptcies in September

In September, the number of corporate bankruptcies, adjusted for court session days, increased slightly by 8. However, the number of bankruptcies remains at a low level.

House prices up by 8.2 percent in August

In August 2020, prices of owner-occupied dwellings (excluding new constructions) were on average 8.2 percent higher than in the same month last year. This is the largest price increase in over one and a half years.

Significant drop in number of hours worked

Due to government support measures, job losses were still relatively limited in Q2 at -2.7 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 5.7 percent lower than one quarter previously.

At the end of June, the number of unfilled job vacancies stood at 200 thousand. This was 26 thousand less than in 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 August 2020, 426 thousand people were unemployed (according to the definition of the International Labour Organisation (ILO)), equivalent to 4.6 percent of the labour force. Unemployment rose by an average of 32 thousand per month over the period June through August.

In Q2 2020, turnover at temporary employment agencies fell by 15.2 percent. Relative to one year previously, turnover was down by 16.6 percent.

GDP (volume), seasonally adjusted
   index (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 second estimate 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 9.4 percent.

On Friday 13 November 2020, CBS will publish the first estimate of GDP and employment over Q3 2020.

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