The Dutch economy contracted by -0.1% in the first quarter of 2024, against the forecasts of economists who had expected a slight growth.

The national statistics agency CBS said static exports in goods and services and a weak industrial sector were the main reasons for the decline, but government and consumer spending remained relatively strong.

The Netherlands emerged from recession at the end of 2023 with 0.3% growth in the final quarter, after nine months of negative figures.

But the latest figures show the Dutch economy lagging behind Belgium, which grew by 0.3% in the first quarter, France and Germany, which recorded 0.2% growth, and the UK, which was up by 0.6%. The 27 EU countries grew by 0.3%.

On a year-on-year basis the Dutch economy shrank by 0.7%, mainly as a result of the downturn in the middle two quarters of 2023.

Pieter Hein van Mulligen, chief economist at the CBS, said industry had endured its worst three-month spell in 15 years, while the construction sector also had a poor start to the year.

More investment

But he said there were also positive signs, such as a 0.4% increase in investments. “It seems businesses are still optimistic enough to start ordering machinery and transport equipment again,” he said.

Consumer spending was up by 0.7%, while government spending increased by 0.6% in the first quarter of 2024.

Households spent more money on clothing, shoes and holiday flights, but relatively little on energy and fuel, partly reflecting the mild winter weather.

The CBS said consumer spending increased year-on-year by 0.4% in March, continuing a rising trend that began in October, and conditions for April were more favourable.

Exports decline

However, exports of goods were down by nearly 6% from the previous year, the 10th consecutive month that the figure has been negative. The biggest decline was in exports of food, chemicals, electronics and machinery.

Goods account for around three-quarters of all Dutch exports.

Van Mulligen said the Dutch national bank DNB’s forecast of 0.3% growth for the year was still attainable. “We’re seeing consumers loosening the purse strings and the jobs market is doing well too,” he said. “In the first quarter we gained just over 40,000 extra jobs.”