The Dutch economy shrank by 0,4 and 0,7 percent in the third and final quarters of 2011; confirmation that the Netherlands is officially in a recession.
A decline in consumer consumption, a drop in government spending, and slack demand for Dutch exports led to a reduction in economic activity.
According to Statistics Netherlands, households spent 1,8 percent less in the fourth quarter of 2011 than they did in the same quarter in 2010, with furniture and car sales declining significantly. Government spending also declined by 0,2 percent, with officials cutting staffing levels, and cost reduction policies implemented in services and administration.
Exports fell by 2,3 percent in the fourth quarter of 2011, and manufacturing output declined by 0,8 percent. The rate of mineral extraction was also reduced by 15 percent compared to the same quarter in 2010, as demand for natural gas decreased sharply.
The decline in economic activity has taken its toll on the number of jobs in the Netherlands. There were 10.000 fewer jobs available at the end of December than there were in the third quarter of 2011, with commercial jobs in trade and business declining considerably. Manufacturing jobs also declined by 2.000 from the third quarter.
The Netherlands is not immune from financial strife in Greece, Spain, Italy and other crisis-hit European economies. It is problematic for the Dutch government to plan their financial strategy when the Netherlands economy fluctuates on events in Athens and Frankfurt, just as it does on policy outcomes in The Hague.The reality is that the Netherlands depends on a European, and global economy, even if that makes financial planning indefinitely more difficult.
It is still important that the Netherlands maintains credible strategies for growth, and makes itself a more attractive place for investment from global corporations. Emerging markets may provide unexpected relief. It is also worthwhile to remember that within Europe, the Netherlands still remains a comparatively healthy economy.