Major developments in 2021 and 2022
This chapter focuses on important current developments; events and shocks that will have an impact on the Dutch economy in 2022. The war in Ukraine is the first striking news event. First and foremost, the war has dramatic consequences for the lives of people in Ukraine. As regards the economy, the whole world is feeling the effects of the war to a greater or lesser extent. In the first section, we discuss the effects of the war on the Dutch goods trade, and the second section deals with the high inflation in the Netherlands and worldwide, which is partly due to the war but also has other causes. Sections 2.4 and 2.5 look at economic shocks that have already affected the Dutch economy for some time: the coronavirus crisis and Brexit.
2.1Key findings
War
Dutch goods exports to Ukraine and Russia have fallen sharply in value since March 2022. The value of exports to Ukraine in March was 84% lower than in the same month of 2021 and for Russia, the export value contracted by 67%. In April, this decline was smaller compared to April 2021, at 48% for Ukraine and 62% for Russia.
The value of imports from Ukraine also fell dramatically, by 10% in March and 79% in April 2022 compared to the same months in 2021. It is a somewhat different story for the import value from Russia, where decreasing import volumes have been strongly offset by sharply increasing import prices, especially of mineral fuels.
Prices
Shortages, disrupted value chains and strong demand for certain products following the coronavirus crisis have caused prices to soar worldwide. Inflation has surged since the end of 2021: in April 2022, consumer prices were almost 10% up on April 2021; manufacturing output prices were even up by 29% on average than a year earlier. These high output prices then push consumer inflation up further. Import prices were therefore much higher, which many industrial producers (such as in the petroleum industry, chemical industry and food industry) incorporated into their selling prices.
Coronavirus crisis
The coronavirus crisis, which broke out in March 2020, had an acute and major impact on the Dutch economy. GDP contracted severely and the international trade in goods and services also declined sharply. The recovery of the goods trade in particular was equally quick and robust. By Q4 2020, import and export volumes of goods already exceeded pre-pandemic levels. However, trade in services did not recover from the initial shock in 2020 and much of 2021, but sank even deeper. Travel restrictions and the resulting sharp drop in international travel, were an important reason for this decline, along with a decrease in specific flows of services as a result of changes in tax regulations in the Netherlands. See also Chapter 4 of this publication. Import and export volumes of the service trade improved in Q1 2022.
Brexit
Brexit has so far mainly affected transit good flows (re-exports and quasi-transit trade) via the Netherlands to the UK. In the first four months of 2022, the level of transit trade was as much as 27% below that of 2015. The picture is very different for domestic exports, which were no less than 30% above the level of 2015 in 2022.
2.2Sharp decline in Dutch exports to Ukraine and Russia
The war in Ukraine, which started on 24 February 2022, has clearly had an impact on the Dutch goods trade with both Ukraine and Russia. In March, Dutch goods exports to both countries plummeted. Exports to Ukraine were 84% lower in March 2022 than in March 2021, and exports to Russia were 67% lower (see also CBS, 2022a). In April, the declines were smaller: 48% lower for Ukraine and 62% lower for Russia, compared to April 2021 (Figure 2.2.1).
Value of imports from Russia actually considerably higher than in 2021
Imports from Ukraine and Russia simultaneously show reductions in import volume and sharp increases in import prices. Compared to March 2021, imports from Ukraine fell by 31% in weight in March 2022, but the value remained fairly stable due to the sharp price rises for maize and sunflower seed oil, for example. In April 2022, the import volume collapsed completely, which explains a 79% drop in the import value compared to April 2021.
The value of imports from Russia is still high, which can be explained by the high oil and gas prices. However, the increase in the import value in April (+61% compared to April 2021) was considerably lower than the increase in March (+115% compared to March 2021). This is also due to declining import volumes. The import from Russia in April 2022 was about 16% lower in weight than in April 2021; in March it was still 2% higher than in March of the previous year.
| Type handel | January | February | March | April |
|---|---|---|---|---|
| Imports from Ukraine | 47.7 | 60.4 | -9.5 | -79.2 |
| Imports from Russia | 152.6 | 91.3 | 114.8 | 60.5 |
| Exports to Ukraine | 46.8 | 2.5 | -84.1 | -48.2 |
| Exports to Russia | 18.3 | 4.9 | -67.0 | -61.9 |
| 1)For the best possible comparison with 2021, quasi-transit trade is included here (trade excluding quasi-transit is available on CBS StatLine). | ||||
Imports from Russia much larger than the other three flows combined
In monetary value, the imports from Russia are many times larger than the value of all three flows combined (Figure 2.2.2). This is attributed to the very prominent share of mineral fuels in the imports from Russia. In 2021, no less than 87% of the total import value from Russia consisted of such products (CBS, 2022b). In the first four months of 2022, the Netherlands imported as much as €13.3 billion from Russia, almost double the imports in the same months of 2021. The second flow relates to exports to Russia worth €1.6 billion in the first four months of 2022, followed by imports from Ukraine (€0.6 billion) and exports to Ukraine (declined to €0.3 billion).
| 2022* | 2021* | |
|---|---|---|
| Imports from Ukraine | 0.63 | 0.63 |
| Imports from Russia | 13.27 | 6.62 |
| Exports to Ukraine | 0.32 | 0.44 |
| Exports to Russia | 1.61 | 2.31 |
| 1)For the best possible comparison with 2021, quasi-transit trade is included here (trade excluding quasi-transit is available on CBS StatLine). | ||
Metals from Russia have also risen sharply in price
Dutch imports from Russia are thus dominated by mineral fuels. These imports mainly consist of crude oil, but also significant quantities of natural gas, petroleum products and coal. We also observed that the imports from Russia are by far the biggest flow in the goods trade with Russia and Ukraine. The logical consequence is that trade in goods other than mineral fuels is relatively limited. Still, there are other goods that are important for Dutch supply and food chains. Though at a great distance from mineral fuels, Dutch imports from Russia also include a relatively large amount of copper, nickel, aluminium, iron and steel. In the first four months, the import value of these metals from Russia increased considerably which is again related to significant price rises in 2022 (Figure 2.2.3).
Imports from Ukraine are dominated by cereals (mostly maize) and vegetable oils (mostly sunflower seed oil). In 2021, over half of the imports from Ukraine consisted of maize and sunflower seed oil (CBS, 2022c). In the first four months of 2022, the Dutch import value of maize was still well above the level of 2021, because the price increases were greater than the decrease in the weight of the imports.
However, if we look specifically at the two months of war in March and April 2022, we see that the weight of the imports of maize is about 60% below the import level of the same period in 2021 and the value at 51%. In fact, imports of sunflower seed oil from Ukraine even dropped by 74% in weight and 69% in value.
Imports from Russia have decreased much less during the two months of war. For mineral fuels, a 7% decrease applies to March and April in comparison with 2021 and for metals (copper, nickel, aluminium, iron and steel) from Russia it involves a decline of 17%.
| 2022* | 2021* | |
|---|---|---|
| Imports from Russia | . | . |
| Copper (products) | 627 | 328 |
| Nickel (products) | 419 | 166 |
| Iron and steel | 286 | 155 |
| Aluminium (products) | 217 | 38 |
| . | . | |
| Imports from Ukraine | . | . |
| Cereals | 234 | 191 |
| Vegetable oils | 151 | 169 |
| Oil seeds and oleaginous fruit | 44 | 34 |
| Ores | 34 | 102 |
| 1)For the best possible comparison with 2021, quasi-transit trade is included here (trade excluding quasi-transit is available on CBS StatLine). | ||
Sharp decline in exports of machinery and equipment
Dutch exports to Russia and Ukraine particularly include machinery and equipment and pharmaceutical products. Exports of these two goods fell sharply in value in the first four months of 2022 compared to 2021. The reason for this is partly due to the European sanctions against Russia.
| 2022* | 2021* | |
|---|---|---|
| Exports to Russia | . | . |
| Machinery and equipment | 402 | 666 |
| Pharmaceutical products | 243 | 403 |
| Scientific instruments | 134 | 144 |
| Plastic(s) (products) | 112 | 110 |
| . | . | |
| Exports to Ukraine | . | . |
| Machinery and appliances | 77 | 88 |
| Pharmaceutical products | 27 | 90 |
| Road vehicles | 26 | 28 |
| Mineral fuels | 17 | 7 |
| 1)For the best possible comparison with 2021, quasi-transit trade is included here (trade excluding quasi-transit is available on CBS StatLine). | ||
2.3Development of trade prices
As a result of increasing demand after the pandemic waves subsided on the one hand, and due to supply difficulties on the other hand, global supply and demand for goods and services are no longer well matched and value chains are disrupted. Prices have risen dramatically in recent months due to new lockdowns in Chinese manufacturing cities and port cities, the war in Ukraine, the reduced cereal exports from that country, uncertainty surrounding future gas supplies, scarcity of food raw materials, chip and container shortages and trade disputes. Inflation has surged since the end of 2021: in April 2022, consumer prices were almost 10% higher than a year earlier (CBS, 2022g). High prices may reduce the purchasing power of consumers, thereby reducing the demand for goods and services and cooling the economy.
Inflation as a result of faltering trade flows, war violence and embargos on oil and gas
Globalisation has contributed to relatively low levels of inflation over the past 20 to 30 years. Today’s upward inflationary pressures are high due to persistent supply difficulties, energy prices and geopolitical tensions, among other things (Meinema, 2022). For many countries, inflation has become a distinct and current issue. Even before the Russia-Ukraine war, the general price level skyrocketed due to the increasing prices of raw materials and imbalances between supply and demand (IMF, 2022; Gourinchas, 2022).
Figure 2.3.1 clearly shows the development of the trade prices. It shows that trade prices in 2020 were below the level of 2015, with the fall in import prices being the greatest. One of the reasons for this is that Dutch imports comprise a relatively large amount of petroleum and petroleum products. As many countries went into lockdown, the demand for petroleum fell and the price plummeted. Moreover, prior to that, there was disagreement among oil-producing countries that led to overproduction and unprecedentedly low prices (RTL News, 2020). Factories were only partially operational during the first pandemic wave, transport was severely curtailed and air traffic came to a virtual standstill. From mid-2021, import and export prices increased in a similar manner. Prices were nearly 25% higher in March 2022 than in they had been in 2015.
| Imports | Exports | ||
|---|---|---|---|
| 2019* | January, 2019* | 100.1 | 101.9 |
| 2019* | February, 2019* | 101.7 | 103 |
| 2019* | March, 2019* | 101.6 | 102.5 |
| 2019* | April, 2019* | 101.8 | 102.2 |
| 2019* | May, 2019* | 100.4 | 103.2 |
| 2019* | June, 2019* | 99.8 | 101.1 |
| 2019* | July, 2019* | 99.3 | 101.5 |
| 2019* | August, 2019* | 99.2 | 100.5 |
| 2019* | September, 2019* | 99.4 | 100.9 |
| 2019* | October, 2019* | 98.7 | 100.1 |
| 2019* | November, 2019* | 98.4 | 99.5 |
| 2019* | December, 2019* | 100.1 | 100.4 |
| 2020* | January, 2020* | 100 | 101 |
| 2020* | February, 2020* | 100.4 | 101.7 |
| 2020* | March, 2020* | 95.9 | 99.1 |
| 2020* | April, 2020* | 92.3 | 95.5 |
| 2020* | May, 2020* | 91.5 | 96.7 |
| 2020* | June, 2020* | 95.1 | 96.5 |
| 2020* | July, 2020* | 93.5 | 97.6 |
| 2020* | August, 2020* | 93.8 | 96.8 |
| 2020* | September, 2020* | 93.4 | 96.9 |
| 2020* | October, 2020* | 93.4 | 96.3 |
| 2020* | November, 2020* | 93.6 | 96.2 |
| 2020* | December, 2020* | 95.7 | 97.3 |
| 2021* | January, 2021* | 97.1 | 98.8 |
| 2021* | February, 2021* | 100.6 | 101.9 |
| 2021* | March, 2021* | 99.7 | 104.4 |
| 2021* | April, 2021* | 101.1 | 104.9 |
| 2021* | May, 2021* | 104 | 107 |
| 2021* | June, 2021* | 107.4 | 104.9 |
| 2021* | July, 2021* | 106.3 | 108.2 |
| 2021* | August, 2021* | 108.7 | 109.2 |
| 2021* | September, 2021* | 109.6 | 109.6 |
| 2021* | October, 2021* | 113.3 | 112.5 |
| 2021* | November, 2021* | 115.2 | 112.9 |
| 2021* | December, 2021* | 114.9 | 114.1 |
| 2022* | January, 2022* | 119.9 | 120.9 |
| 2022* | February, 2022* | 122.5 | 120.2 |
| 2022* | March, 2022* | 123.4 | 123.7 |
Raw material prices facing unprecedented levels
A severe shortage of certain raw materials has developed worldwide, partly because stocks were hardly built up during the coronavirus pandemic or were depleted when demand rose sharply again. Supply difficulties and higher transport costs also contributed to the shortage, which led to a price increase in several product groups (Figure 2.3.2). Industrial manufacturers in the Netherlands import a large amount of raw materials and fuels from other countries for their output. While in 2020 many import prices fell due to overcapacity, lower demand caused by the coronavirus crisis and the low oil price, in 2021 and 2022 key imports experienced a sharp price increase. Meat, fruit and vegetables, vegetable oils, cereals, paper, iron and steel and aluminium are some examples of products that have become much more expensive on the global market. Consequently, countries rich in raw materials such as South Africa, Brazil and Russia see their exports and export value grow faster than Europe and the US (Nauta, 2022).
Dutch industrial producers paid 61% more for aluminium from other countries than a year earlier. The price of aluminium is being driven by high demand, among others. In addition, China has closed smelters as a result of lockdowns against local outbreaks of the coronavirus. China is the world’s leading manufacturer of aluminium. In Europe, too, smelters have halted their production because it was no longer profitable to continue due to the high energy prices. Tensions surrounding Ukraine also play a role, as Russia is a major aluminium producing country and any conflict could jeopardise Russian supplies (Nieuws.nl, 2022; Bakker, 2022).
Also, the import of paper pulp became more expensive in 2021 and 2022. There is a shortage of paper pulp due to transport difficulties and the high demand for cardboard as a result of online shopping. Stocks of pulp have fallen sharply worldwide (RTL News, 2022). Pulp is used in diapers, toilet paper and books for example (NOS News, 2021). In April 2021, the import prices of paper pulp were up by 4% on the previous year. In 2022, the price of paper pulp from abroad increased by almost another 30% compared to the previous year.
Also, the price rise of vegetable oils continues: in April 2021, the import prices were up by over 60% on the previous year. In April 2022, Dutch manufacturers paid almost 50% more for vegetable oils from abroad than in April 2021. This price increase is mainly due to the worldwide production shortfall or difficult circumstances for harvesting and exporting (such as the war in Ukraine), low stocks due to previous poor harvests and the worldwide increased consumption of biodiesel (NU, 2021; Engwerda, 2021; Nieuwe Oogst, 2021).
| Product | April 2020 | April 2021 | April 2022* |
|---|---|---|---|
| Meat | 0.1 | 3.0 | 25.1 |
| Fruit and vegetables |
3.5 | -3.3 | 11.6 |
| Vegetable oils | 1.2 | 60.2 | 49.6 |
| Cereals | -3.3 | 12.1 | 36.0 |
| Pulp, paper and cardboard |
-7.4 | 3.9 | 29.5 |
| Iron and steel | -6.4 | 26.0 | 60.1 |
| Aluminium | -10.3 | 17.0 | 61.0 |
Manufacturing output prices up by 29 percent compared to April 2022
Prices of Dutch-manufactured products at home and abroad were on average 29% higher in April 2021. The increase in manufacturing output prices has been unprecedented since July 2021. In recent months, the war in Ukraine has put additional pressure on prices, on top of the price increases that resulted from the rapid recovery of the economy after the coronavirus crisis (CBS, 2022e). Higher manufacturer prices have also been driving up the inflation rate for consumers. The output prices abroad rose more rapidly than in the Netherlands.
Figure 2.3.3 shows the change in output prices in April 2021 and 2022 compared to the same month a year earlier for the leading industries. First, the prices of fuels and energy have increased substantially. In March 2022, the price of a barrel of North Sea Brent oil was 101 euros, well over 83 percent more than in the previous year (CBS, 2022e). This in turn affects processed products, like fuel for transport, heating of greenhouses or the production of fertilisers. Also in the chemical industry, price increases are strongly affected by changes in the oil prices. Manufacturers of food products, rubber and plastics, and metal products also made hefty increases in their output prices. The price increase was kept at a relative minimum in the machinery industry, the electrotechnical industry and the motor vehicle industry. The sharpest price increases were seen in 2022, but even in 2021 some industries already had significantly higher output prices compared to April 2020.
| April 2022* | April 2021 | |
|---|---|---|
| Petroleum | 108.6 | 99.5 |
| Chemicals | 45 | 28.8 |
| Food | 21.6 | 5.3 |
| Rubber and plastics | 18.7 | 5.1 |
| Metal products | 17.6 | 2.9 |
| Machinery | 6.4 | 0.9 |
| Electrotechnical products | 5 | -1.9 |
| Motor vehicles | 3.1 | 1.8 |
| 1)The eight industries mentioned account for almost 80 percent of the manufacturing industry. | ||
2.4Developments of the Dutch economy and the international trade since the coronavirus crisis
The year 2021 has turned out to be another eventful one for the Dutch economy and society. At the start of that year, the Netherlands was still under one of the severest lockdowns to curb the coronavirus pandemic. As early as 13 October 2020, new response measures to the coronavirus were imposed, which became progressively stricter over the course of autumn and winter and began to have an increasing impact on daily life. From 23 January to 28 April 2021, the Netherlands even went into a full lockdown with a nationwide curfew to further curb the spread of the virus. The full lockdown, the shutdown of entire industries, such as the accommodation and food services and culture sector as well as the travel restrictions, stalled the recovery of the Dutch economy in the winter of 2020/2021. There was no economic growth in the fourth quarter of 2020 compared to the previous quarter, and in the first quarter of 2021, GDP only showed a 0.1% growth. Thus, at the beginning of 2021, the economy was still 3.5% smaller than at the end of 2019, just before the outbreak of the coronavirus pandemic (Figure 2.4.1).
| GDP development | ||
|---|---|---|
| 2015 | Q1, 2015 | 100 |
| 2015 | Q2, 2015 | 100.3 |
| 2015 | Q3, 2015 | 100.7 |
| 2015 | Q4, 2015 | 100.7 |
| 2016 | Q1, 2016 | 101.6 |
| 2016 | Q2, 2016 | 101.8 |
| 2016 | Q3, 2016 | 103.0 |
| 2016 | Q4, 2016 | 103.8 |
| 2017 | Q1, 2017 | 104.4 |
| 2017 | Q2, 2017 | 105.3 |
| 2017 | Q3, 2017 | 106.0 |
| 2017 | Q4, 2017 | 106.9 |
| 2018 | Q1, 2018 | 107.3 |
| 2018 | Q2, 2018 | 108.0 |
| 2018 | Q3, 2018 | 108.3 |
| 2018 | Q4, 2018 | 108.7 |
| 2019 | Q1, 2019 | 109.5 |
| 2019 | Q2, 2019 | 109.9 |
| 2019 | Q3, 2019 | 110.4 |
| 2019 | Q4, 2019 | 110.8 |
| 2020 | Q1, 2020 | 109.2 |
| 2020 | Q2, 2020 | 100.6 |
| 2020 | Q3, 2020 | 106.9 |
| 2020 | Q4, 2020 | 106.9 |
| 2021* | Q1, 2021* | 106.9 |
| 2021* | Q2, 2021* | 111.0 |
| 2021* | Q3, 2021* | 112.7 |
| 2021* | Q4, 2021* | 113.5 |
| 2022* | Q1, 2022* | 114.0 |
GDP nearly 3% more growth in Q1 2022 than before the coronavirus crisis
Q2 2021 was the final turning point in the economic recovery. The full lockdown was gradually being phased out and Dutch society opened up again. GDP saw a 3.8% growth in Q2, mainly owing to considerably higher consumer spending, government expenditure and a higher trade surplus. Consequently, the size of the Dutch economy in that quarter was again almost the same as before the coronavirus pandemic. During the next three quarters, the Dutch economy continued to grow at a steady pace. The GDP growth rate was nearly 3% higher in Q1 2022 than before the start of the pandemic. Of course, this did not apply to all industries. For example, in Q1 2022, the value added in the culture and leisure industry was still a fifth smaller than before the coronavirus crisis. In Q1 2022, the manufacturing industry was 6% larger than at the end of 2019, and for the business services industry this was nearly 3%.
| Goods imports | Service imports | Goods exports | Service exports | ||
|---|---|---|---|---|---|
| 2019 | Q1, 2019 | 100.0 | 100.0 | 100.0 | 100.0 |
| 2019 | Q2, 2019 | 101.1 | 103.0 | 100.6 | 104.2 |
| 2019 | Q3, 2019 | 103.1 | 102.7 | 102.0 | 104.4 |
| 2019 | Q4, 2019 | 104.4 | 97.2 | 102.8 | 101.6 |
| 2020* | Q1, 2020* | 99.5 | 102.2 | 99.9 | 103.4 |
| 2020* | Q2, 2020* | 92.6 | 86.4 | 91.6 | 88.7 |
| 2020* | Q3, 2020* | 101.5 | 87.2 | 101.2 | 90.3 |
| 2020* | Q4, 2020* | 104.9 | 83.6 | 104.2 | 85.8 |
| 2021* | Q1, 2021* | 104.3 | 81.8 | 104.8 | 84.4 |
| 2021* | Q2, 2021* | 108.1 | 78.8 | 108.1 | 84.9 |
| 2021* | Q3, 2021* | 109.7 | 87.8 | 108.6 | 95.0 |
| 2021* | Q4, 2021* | 111.1 | 79.6 | 109.4 | 89.2 |
| 2022* | Q1, 2022* | 106.0 | 91.5 | 106.0 | 97.4 |
Sharp contraction and quick recovery of the goods trade
The volume of the Dutch trade in both goods and services contracted rapidly at the beginning of the coronavirus crisis, as shown by Figure 2.4.2. Q2 2020 was the low point for goods trade with both the goods imports and exports about 11% smaller in volume than in Q4 2019. The relatively quick recovery of the global trade in goods was also keenly felt in the Netherlands. By Q4 2020, import and export volumes already exceeded pre-pandemic levels. Despite new pandemic waves at home and abroad, the volume of the goods trade continued to grow steadily throughout 2021. The volume of the Dutch goods trade was under pressure during Q1 2022. A possible cause of this are the imbalances and the worldwide shortages and difficulties in logistics chains, high prices, new lockdowns in China and the economically unstable situation after Russia’s invasion of Ukraine.
Big blow for the trade in services and slow recovery
The impact of the coronavirus crisis on the international trade in services was initially of a similar order to the goods trade. The volume of services exports was almost 13% smaller in Q1 2020 than at the end of 2019, the volume of imports being 11% smaller. Unlike goods trade, trade in services did not recover, but sank even deeper. Travel restrictions related to the coronavirus crisis and the resulting sharp drop in international travel, were an important reason for this decline, along with a decrease in specific flows of services as a result of changes in tax regulations in the Netherlands. See also Chapter 4 of this publication. The volume of services exports was almost 6% smaller in Q1 2022 than before the start of the coronavirus crisis, and the volume of imports was 10% smaller. However, imports of services are already higher in value than in 2019 (CBS, 2022h).
Import value from China in 2021 25% above level of 2019
Figure 2.4.3 shows the development of the Dutch import value of goods from the main importing countries since the start of the coronavirus crisis. Imports of goods from China developed differently from imports from neighbouring countries and other imports in both coronavirus years. The coronavirus outbreak began in China, and China responded by a full lockdown for all affected areas. Chinese exports, including to the Netherlands, contracted substantially, however, quickly recovered in the spring of 2020. By July 2020, the import value from China had already returned to its pre-crisis level (the average of the import values in 2019 has been taken for this). Like the Netherlands, our neighbouring countries were hit by the coronavirus crisis a little later in the winter and the lockdowns lagged a few months behind China. The contraction in goods imports from Germany and Belgium (and imports from all other countries) particularly decreased in April and May of 2020. These imports also quickly recovered afterwards, though still remained below the level of 2019. Even if not everyone actually went on holiday in 2020, August is a holiday month and is generally characterised by a lower level of trade.noot1
In early 2021, imports from China were also under pressure, possibly due to resurgent coronavirus figures and added caution in the run-up to the Winter Olympics (Reuters, 2022). Europe’s winter of 2020/2021 was also difficult with the emergence of the Delta variant of the coronavirus and renewed strict lockdowns. In March 2021, the recovery in trade finally took hold and goods imports picked up again. Over the whole of 2021, the import value from China was a quarter higher than in 2019, compared to 17% import growth from Germany, 15% growth in goods imports from Belgium and 12% growth in imports from the non-top 3 partner countries. In the winter and spring of 2022, China was again hit by mounting disease numbers, and the Zero-Covid policy was again depressing Chinese exports and now also economic growth (Bloomberg, 2022).
| Jaar | Maand | Germany | Belgium | China | Other countries |
|---|---|---|---|---|---|
| 2020 | Jan, 2020 | 125.1 | 97.2 | 115.2 | 118.9 |
| 2020 | Feb, 2020 | 119.0 | 91.9 | 86.0 | 110.6 |
| 2020 | Mar, 2020 | 127.6 | 95.7 | 81.4 | 117.0 |
| 2020 | Apr, 2020 | 102.8 | 75.6 | 93.2 | 92.8 |
| 2020 | May, 2020 | 99.4 | 77.2 | 101.0 | 91.0 |
| 2020 | Jun, 2020 | 120.6 | 92.9 | 112.0 | 104.0 |
| 2020 | Jul, 2020 | 116.7 | 90.3 | 114.8 | 102.7 |
| 2020 | Aug, 2020 | 106.2 | 84.8 | 103.0 | 94.5 |
| 2020 | Sep, 2020 | 129.3 | 92.9 | 113.7 | 108.7 |
| 2020 | Oct, 2020 | 127.4 | 97.2 | 111.3 | 109.5 |
| 2020 | Nov, 2020 | 129.8 | 96.7 | 113.8 | 111.8 |
| 2020 | Dec, 2020 | 128.6 | 104.6 | 105.5 | 113.0 |
| 2021* | Jan, 2021* | 125.0 | 91.8 | 108.1 | 103.4 |
| 2021* | Feb, 2021* | 130.5 | 92.3 | 97.1 | 109.2 |
| 2021* | Mar, 2021* | 154.6 | 112.0 | 118.6 | 137.3 |
| 2021* | Apr, 2021* | 141.1 | 105.4 | 111.3 | 128.0 |
| 2021* | May, 2021* | 136.1 | 110.0 | 110.7 | 121.8 |
| 2021* | Jun, 2021* | 150.3 | 117.5 | 117.5 | 133.8 |
| 2021* | Jul, 2021* | 142.3 | 116.2 | 121.3 | 131.5 |
| 2021* | Aug, 2021* | 134.1 | 110.2 | 131.1 | 131.6 |
| 2021* | Sep, 2021* | 152.5 | 129.3 | 138.9 | 138.8 |
| 2021* | Oct, 2021* | 151.5 | 125.4 | 129.7 | 149.0 |
| 2021* | Nov, 2021* | 165.0 | 137.6 | 151.8 | 160.8 |
| 2021* | Dec, 2021* | 173.1 | 135.2 | 159.6 | 152.8 |
2.5Brexit makes transit trade in goods less appealing
On 31 January 2020, the United Kingdom had already formally exited the European Union, followed by a transitional period during which the UK continued to comply with European trade rules. This decision was taken in order to avoid acute trade disruptions after Brexit and to have time available to lay down the new trade rules in a trade agreement. That transitional period ended on 31 December 2020. On 1 January 2021, Brexit became effective with the application of new rules on trade between the United Kingdom and the EU (European Commission, 2021).
Fewer goods via the Netherlands to the UK after Brexit...
UK’s withdrawal from the EU has particularly affected goods originating from non-EU countries being transported via the Netherlands to other countries (see: re-exports and quasi-transit trade). In the first four months of 2022, these re-exports and quasi-transit goods flows are significantly below the level of the years 2015 to 2020 (Figure 2.5.1 Goods flow ‘Via the Netherlands to the UK). In 2015, the year leading up to the Brexit referendum, 27% more goods in terms of value passed through our country across the North Sea than in 2022. Goods that are not produced in the EU or in the UK and which are shipped via the Netherlands to the United Kingdom will namely be taxed twice because of Brexit. Moreover, traders also have to deal with customs formalities and controls, if any, twice (CBS, 2021a). This has made it much more appealing for British companies to import goods directly without a stopover in the Netherlands. The total transit trade of goods via the Netherlands to all destinations has in fact increased significantly in value during the same period.
| Exports via the Netherlands to the UK | Exports via the Netherlands total | Domestic exports to the UK | Domestic exports total | |
|---|---|---|---|---|
| 2015 | 100 | 100 | 100 | 100 |
| 2016 | 96 | 98 | 114 | 95 |
| 2017 | 99 | 115 | 107 | 107 |
| 2018 | 102 | 120 | 101 | 113 |
| 2019 | 114 | 127 | 117 | 118 |
| 2020 | 90 | 122 | 90 | 110 |
| 2021 | 52 | 132 | 121 | 126 |
| 2022 | 73 | 174 | 130 | 152 |
| 1)'Exports via the Netherlands' is equivalent to the sum of re-exports and quasi-transit trade (for the best possible comparison over time). | ||||
... However more domestic exports to the UK
Domestic exports to the United Kingdom also lag behind the total domestic exports in terms of development (percentage growth), but the differences here are much smaller than for transit trade flows.noot2 In the first four months of 2022, the value of domestic exports to the UK was as much as 30% above the level of 2015, whereas this was 27% lower for transit trade. Possible explanations for the persistently high level of domestic exports to the UK in 2021 and 2022 are, on the one hand, the high prices for products sold to the UK (such as chemicals and mineral fuels) and, on the other hand, the fact that various trade-restrictive measures (especially in agriculture) will not be introduced until later this year (Jukema et al., 2022).
Hardly any growth in exports of food and beverages
Figure 2.5.2 shows that the export value of Dutch food and beverages to the United Kingdom was at a slightly higher level (+6%) in the first four months of 2022 than in the same period in 2015, the year leading up to the Brexit referendum. CBS previously reported that Dutch companies exported even fewer fresh fruit and vegetables and perishables, such as peppers, cucumbers, onions and pears to the UK in 2021 than in 2020 (CBS, 2021b). Now that the UK is no longer a member of the EU, Dutch exporters have to consider various non-tariff measures and inspections, aside from longer transit times (CBS, 2021a and 2021c). However, a higher value of processed foodstuffs, cattle feed and non-alcoholic beverages was shipped to the UK in the first four months of 2022 than in the same period in 2015, resulting in modest export growth for the food and beverage product group after all.
In the first four months of 2022, the export value of all other product categories was actually much higher than in the same period in 2015. The export value of Dutch chemical products such as medicines and plastics was about 47% higher in 2022 than in the same period in 2015. For manufactured goods (including paper and cardboard, medical instruments and devices, toys), this growth was 20%, for mineral fuels (such as refined petroleum products and electrical energy) this was 24%, for transport equipment (e.g. passenger cars or other motor vehicles) 19%, and for raw materials and natural products as well as machinery and equipment, this was as much as 61%. The product category of raw materials and natural products includes flowers and plants and vegetable oils and fats, for example. In the first four months of 2022, Dutch companies sold over twice as many flowers and plants in terms of value to the UK compared to the same period in 2015. For vegetable oils, it is even almost three times as much. Within the machinery and equipment group, we observe a particular growth in the export of chips and semiconductor elements, electromedical and radiological equipment and office machines to the UK.
| 2022* | 2021* | 2020 | 2019 | 2015 | |
|---|---|---|---|---|---|
| Chemical products | 1599 | 1387 | 1197 | 1477 | 1086 |
| Manufactured goods | 1239 | 1464 | 970 | 1196 | 1033 |
| Raw materials and natural products | 856 | 857 | 564 | 681 | 532 |
| Machinery and equipment | 1082 | 1382 | 712 | 855 | 674 |
| Mineral fuels | 1389 | 772 | 460 | 1082 | 1116 |
| Transport equipment | 540 | 411 | 471 | 575 | 452 |
| Food and beverages | 1533 | 1374 | 1330 | 1526 | 1441 |
Twice as many business services to the UK as before the referendum
At the same time, the export value of services to the UK increased by 96% to €7.5 billion in Q1 2022 compared to the same quarter in 2015, the year leading up to the Brexit referendum. This is mainly explained by much higher exports of business services (including legal and accounting services) and transport services than in 2015. With a common share of 58%, these types of services are the principal forms of the trade in services to the UK. In comparison with Q1 2015, the expenditure of British tourists and business travellers during their stay in the Netherlands decreased by 60% in 2022.
2.6References
References
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Bloomberg (2022). China’s export growth weakens to 2020 low as lockdowns bite. Bloomberg.
CBS (2021a). 121 million euros paid in duties on imports from the UK. Statistics Netherlands: The Hague/Heerlen/Bonaire.
CBS (2021b). Fewer food products crossing the Channel. Statistics Netherlands: The Hague/Heerlen/Bonaire.
CBS (2021c). Handel in voeding en dranken onderhevig aan kwaliteit verbeterende regels. Statistics Netherlands: The Hague/Heerlen/Bonaire.
CBS (2021d). Veel doorvoer van goederen, opbrengsten relatief laag. Statistics Netherlands: The Hague/Heerlen/Bonaire.
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Noten
Month-on-month comparisons should be interpreted with caution as these figures are not price or seasonally adjusted.
We observe the same trend on the import side: import value from the UK in 2021 is 28% higher than in 2015; the total import value has increased by 42% in the same period.