Economic Outlook in July Turns More Negative

On July 31, 2023, at 06:30, the Central Bureau of Statistics (CBS) reported that the economic situation in the Netherlands in July was more negative compared to June. The Conjunctuurklok (economic clock) for July showed that 6 out of 13 indicators performed better than their long-term trend.

The Conjunctuurklok serves as a tool to determine the state and development of the Dutch economy. It integrates almost all essential economic information published by the CBS during the past month or quarter. However, it is crucial to note that the conjunctuurklok’s macroeconomic view may not apply equally to all households, businesses, or regions.

In the consumer sentiment, there was no improvement as people remained pessimistic in July, continuing from the previous month. Consumer confidence remained well below the average of the past twenty years. Similarly, producer confidence also weakened in July and was below the long-term average.

Regarding specific economic indicators, households increased their purchases of goods by 1.4 percent in May 2023 compared to May 2022, adjusted for price changes and day-of-the-week patterns. However, they bought more services and fewer goods.

The volume of goods exported in May 2023 was 0.8 percent larger than in May 2022, with notable increases in the export of transport equipment, machinery, and appliances.

Investments in tangible fixed assets were notably up by 6.9 percent in May 2023 compared to the previous year, largely due to increased investments in buildings, passenger cars, and aircraft.

The production of the Dutch industry saw a decline of 9.2 percent in May 2023 compared to May 2022. This decline has been consistent throughout the preceding months of 2023, with production seeing a 1.2 percent increase compared to April 2023.

Faillissements (bankruptcies) increased for the third consecutive month. In June 2023, there were 48 more bankruptcies than in May, corrected for court hearing days.

In the housing market, existing home prices were on average 5.5 percent lower in June 2023 than in June 2022. However, compared to May 2023, the price index for existing homes rose by 0.2 percent.

The total number of hours worked by employees and self-employed individuals in the first quarter of 2023 increased by 0.7 percent, seasonally adjusted, compared to the previous quarter.

By the end of June 2023, there were 353 thousand unemployed people aged 15 to 75 years, accounting for 3.5 percent of the labor force, remaining stable compared to May. The number of unemployed individuals showed a slight average decline of 1 thousand per month from April to June.

Despite these negative economic indicators, the revenue of temporary employment agencies and labor mediation increased by 3.2 percent in the first quarter of 2023 compared to the previous quarter.

In terms of the Gross Domestic Product (GDP), there was a 0.3 percent decline in the first quarter of 2023 compared to the fourth quarter of 2022. This was primarily due to a higher withdrawal from inventories.