Dutch GDP Remains Strong

Dutch GDP growth slowed between July and September but the broader economic picture stayed rosy, with the expansion driven by strength in exports, consumer spending and investments.

The eurozone’s fifth largest economy grew 0.4% from the previous quarter, when it had grown 1.5%—a rate that Statistics Netherlands on Tuesday called exceptionally strong, Reuters reported.

National forecaster CPB said in September growth was likely to reach 3.3% this year, marking the strongest year since 2007. Year-on-year growth in third quarter was 3%.

“The Dutch economy remains strong on all fronts”, Statistics Netherlands chief economist Peter Hein van Mulligen said. “The rapid expansion continues, with companies increasing investments and hiring.”

Economists surveyed by Reuters had forecast quarter-on-quarter growth in the third quarter of 0.5%.

The slowdown was mainly due to a cooling down of real estate investments, which increased with double-digit numbers in previous quarters. Overall however, investments were the strongest driver of growth as companies spent more on new equipment and machinery.

Exports and household spending also picked up speed, as international sales of machines, cars and chemicals increased, while consumers bought more clothes, furniture and electrical appliances.

Job growth accelerated to the highest level of the past decade, with companies increasingly opting for permanent contracts for new staff, instead of temporary hirings. “More and more companies report difficulties in finding new staff”, Van Mulligen said.

That has so far not led to significant pay rises, however. “Slow wage growth remains a puzzle”, he said. The total number of jobs in the Netherlands grew by 223,000 compared to the third quarter of 2016, while unemployment dropped to the lowest level since 2011 at 4.7%.