Dutch economy grows, but no celebration yet

The latest figures from the Central Bureau of Statistics (CBS) show that the Dutch economy grew by 0,1 per cent in the last quarter compared to the previous, the smallest amount of growth measured.

This is almost all of the good news, however, as CBS also reports that there were 46.000 fewer jobs in the third quarter.

Compared to this time last year, the economy shrank by 0,6 per cent, investment is lower, household consumption is still dropping and there are 160.000 fewer jobs.

That is the biggest loss of jobs since CBS began measuring in 1995.

Small signs of growth

Mining and quarrying grew strongly as in previous quarters, by 7,1 per cent. This was mainly due to increased exports of natural gas, which contributed to the 2,1 per cent growth in exports.

In previous quarters, growth in natural gas was mostly due to domestic consumption, thanks to the relatively cold weather of last winter and spring, whereas now the cause is international demand.

While many industries are still producing less than a year ago, the general decline in production is levelling off. For example, while construction shrank by 2,6 per cent this quarter, last year it had shrunk by 5,6 per cent.

Households spending still dropping

Households spent 2,3 per cent less on goods and services in the third quarter than a year earlier. Consumption has now been shrinking for two and a half years in a row.

As in previous quarters, households mainly held back buying less durable goods such as cars, clothing and furniture, as well as on basics like food, energy and fuel.

Dutch government consumption also shrank by 1,2 per cent, mainly due to decreased spending on public administration. Spending on healthcare, on the other hand, was higher than a year earlier.

"Disturbing" loss of jobs

In the third quarter of 2013, there were 160 thousand less jobs than in the corresponding quarter of 2012, a decrease of 2 per cent.

The construction industry shed the most positions over this year: 31.000 in total. The healthcare sector was not far behind, where the number of jobs has decreased by 30,000 since 2012. Especially hard hit were jobs in childcare and homecare.

Minister Henk Kamp of Economic Affairs said the decrease in the number of jobs was "disturbing," adding, "For the economy to recover, it is imperative that the Cabinet continues with business policies and the implementation of reforms that strengthen the economy," he said.

The only gleam of light in this tunnel is a small increase in the number of job vacancies: 3.000 more this quarter than last, bringing the total number up to 94.000, which is good news for people now trying to find a job in the Netherlands.

Cautious optimism

Minister of Finance Jeroen Dijsselbloem considers the numbers to be good news, but he was quick to point out that the recovery is still fragile.

"As CBS stated, we are slowly climbing out of a deep valley. There is no reason for too much optimism. Many jobs have disappeared, domestic spending remains low and public finances are still in heavy weather. Sustainable economic growth is needed to restore order to public finances."

While the government restrains its excitement, the president of De Nederlandsche Bank Klaas Knot is able to enjoy a small reputation as a soothsayer. He predicted in October that the economy would climb out of recession, based on a "feeling" he got from a few improving domestic and international conditions.

"I think a lot of the lights are green," Knot said in October. "It is almost inevitable that those numbers will be positive."

Sources: CBS, Volkskrant

Alexandra Gowling


Alexandra Gowling

Alexandra is an Australian citizen and an experienced expat, having spent (quite a bit of) time in Asia before coming to the Netherlands a year ago. She enjoys writing, reading...

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