SDG 8.1 Economy and factors of production

The first part of SDG 8 relates to the aim of more sustainable and efficient economic growth, focusing on innovation, entrepreneurship and the environment. While economic growth leads to an improvement in material well-being in the short term, some economic activities may be harmful to the living environment and people’s well-being in the long term.

• Overall, labour productivity is trending upwards, but the growth rate is slowing. Labour productivity fell in 2023 and 2024.
• GDP per capita, individual consumption and median disposable income are growing and among the highest in the EU.
• The proportion of earned income from labour is trending downwards, which means that the share from corporate profits is increasing. 

Dashboard and indicators

Colour codes and notes to the dashboards in the Monitor of Well-being

The size of the economy can be calculated based on three approaches: output, income and spending. Gross domestic product (GDP) is a measure of total economic output. The production of goods and services requires factors of production, such as physical capital, labour, knowledge and raw materials. Currency-based indicators have been adjusted to account for price fluctuations. The base years for price changes vary.

Resources and capabilities refers to the amount of capital, labour, knowledge and raw materials used in the production of goods and services. In 2024, gross investment in tangible fixed assets amounted to 16.1 percent of GDP. As in previous years, this figure was low compared to other countries. The Netherlands was ranked 19th in the EU in 2024. Countries in Eastern Europe in particular (such as the Baltic States, Czechia and Croatia) invest a relatively large share of their GDP in tangible fixed assets.

More and more hours are being worked per inhabitant. This increase is consistent with the rise in net labour force participation and the decrease in unused labour potential (SDG 8.2 Labour and leisure time). Median disposable income is trending upwards overall, but declined to 34,000 euros in 2023 after peaking in 2021. The Netherlands has one of the highest levels of disposable income in the EU-27, ranking fifth in 2023.

Although the trends for physical and knowledge capital stocks per hour worked are stable, the long-term picture is less positive. The physical capital goods stock rose to 177 euros per hour worked up until 2013, but has since gradually fallen back to 170 euros in 2023. Between 1995 and 2015, the stock of intellectual capital goods increased from 7.1 euros to 13 euros per hour worked, after which a slight decline is observable.

Use refers to the productivity and sustainability of how the factors of production are utilised, and to the consumption of the goods and services produced. Labour productivity and resource productivity are both increasing.

Labour productivity is defined as the value added per hour worked. Dutch labour productivity is the third highest in the EU-27, after Ireland and Denmark. Although it is still trending upwards, the growth rate has been slowing down since 2021. In 2023 and 2024, there was even a decline. Productivity is currently stuck at around 57 euros per hour worked.

Resource productivity – the value added for every kilogram of material consumption – is rising. There was an especially sharp increase in the most recent year for which data are available (17 percent from 2022 to 2023). At 5.46 euros per kilogram of material, the Netherlands has the highest level of resource productivity in the EU.

Individual consumption is trending upwards and ranks among the highest in the EU.

Outcomes refers to the rate, efficiency and sustainability of economic growth. The Dutch economy is growing. According to the first annual estimate of 2024, GDP per capita (in constant 2021 prices) has risen to almost 53,000 euros. This is one of the highest levels in the EU (third out of 22 countries). From 2023 to 2024, growth was relatively slow, at 0.3 percent. More than a third of GDP is generated by exports.

The labour income share (LIS) provides an indication of who benefits from an economy’s earnings. A falling LIS means that labour income as a proportion of total income is declining while corporate profits are increasing. Labour income accounted for 69 percent of earned income in 2023, and this share is trending downwards. In the mid-1990s, the LIS was still above 80 percent. This means that the share of companies’ operating profits in earned income is increasing. The LIS is calculated only for industries where it makes sense to distinguish between income from labour and profit (the market sector). The LIS is not calculated for the government sector, education, health care, the mining and quarrying industry, financial services or real estate activities.

To meet Dutch consumption needs, an average of 31.7 tonnes of raw materials per inhabitant were extracted globally in 2022 (the raw materials footprint). This was a decrease compared to 2021, when 32.6 tonnes were extracted per inhabitant. Compared to other EU countries, the Netherlands’ had a small raw materials footprint in 2020.

Subjective assessment refers to the confidence of consumers and producers. Consumer confidence measures consumers’ willingness to buy, as well as their confidence in their own financial situation and the economic climate. While consumer confidence remains on a downward trend, there has been an improvement in recent years. During the coronavirus crisis, consumer confidence was low. In 2022, the annual average reached an all-time low of -47, before rebounding to -24 in 2024. A negative figure means that more than half of consumers lack confidence.

Whereas consumers became more optimistic in 2023 and 2024, producers in the manufacturing sector were less confident about the development of manufacturing production. In 2024, the difference between companies with a positive and negative outlook was -2.9 percent. Business confidence in the non-financial business sector overall, including manufacturing, did rise significantly in 2024, but the balance between the percentages of positively and negatively inclined entrepreneurs remained negative (-4.9 percent).