Dutch Economy Remains in Recession in Q1

According to the first estimate conducted by Statistics Netherlands, the Dutch economy contracted 0.1 percent in the first quarter of 2013 relative to the fourth quarter of 2012. For the third consecutive quarter, the economy is in decline. In the preceding quarters the economy shrank by 1.0 and 0.4 percent respectively. The contraction relative to the first quarter of 2012 was 1.7 percent.

Household spending was 2.1 percent down in the first quarter from one year previously. Household consumption has shown a downward trend for two years now. Consumers are very reluctant when it comes to purchasing durable articles. In the first quarter, they also bought far fewer cars, articles of clothing and furniture than one year previously. Spending on food, drinks, tobacco and services also declined further, but due to the cold weather conditions, the consumption of natural gas was much higher. 
Government consumption contracted 0.9 percent. Spending on public administration has fallen over the past three years, but public spending on care did rise in the first quarter. Fixed capital formation plummeted  by 11.6 percent in the first quarter compared to the first quarter of 2012. Investments have dropped for five quarters in a row. The decline in the first quarter was more substantial than in the preceding quarters and occurred across nearly all categories. 
Exports grew by 2.3 percent in the first quarter from last year’s first quarter. Exports of goods manufactured in the Netherlands declined marginally. In 2012 exports still grew somewhat. The reason for the decline in the first quarter is the reduced foreign demand for manufactured products, in particular metal products and transport vehicles. Re-exports grew 4.4 percent in the first quarter. The growth was less substantial than in the preceding quarters. As consumption and investments fell and re-exports grew only modestly, imports hardly improved. 
Many sectors suffer the effects of the lasting econimc recession. The construction sector took the biggest blow. In the first quarter, output generated by the construction sector slumped 11.6 percent compared to one year previously. Manufacturing output fell by 4.5 percent in the first quarter. The sector mineral extraction, on the other hand, showed substantial growth due to higher domestic consumption of natural gas and higher exports.

CBS | Nuno Fontes | nuno@tradingeconomics.com
5/15/2013 2:07:50 PM