Dutch labour productivity rises 2.4%, biggest gain in 20 years

Labour productivity in the Netherlands rose 2.4% in 2025, the biggest annual gain in 20 years and a reversal of two consecutive years of decline, according to national statistics agency CBS.

The Dutch economy grew 1.8% over the year while the total number of hours worked fell by 0.6%, meaning the increase came entirely from workers producing more per hour. Productivity dropped 1.9% in 2023 and 0.3% in 2024. Over the past 10 years it grew by an average of just 0.3% a year, against 0.7% in the previous decade and 1.7% in the one before that.

The shift comes after repeated warnings from economists and policy advisers that weak productivity was a structural problem in the economy. Research institute TNO warned in January last year that the Netherlands was lagging behind comparable countries, pointing to an over-reliance on cheap flexible labour and underinvestment in research.

CBS reported in 2024 that Dutch firms were becoming less productive, with 2023’s drop one of the sharpest in 50 years.

The productivity gain comes as pressure on the labour market has eased. Unemployment rose to 4% at the end of last year, back to its pre-pandemic level, while the number of job vacancies fell to 93 for every 100 unemployed people, down from a peak of 142 in 2022.

Outpacing the neighbours

The 1.8% growth figure is higher than in any of the large eurozone economies around the Netherlands.

The German economy, Europe’s largest, grew just 0.2% after two years of contraction. France managed 0.8% and Belgium 1%, while growth across the European Union as a whole was 1.5%. Ireland recorded 12.3%, but CBS noted the figure is heavily distorted by the accounts of multinationals based there.

Exports, which had fallen in each of the previous two years, grew 2.4%, with food, machinery, oil and gas products leading the rebound despite higher US import tariffs and continued international tensions.

Household spending rose 1.5% and real disposable income was 2.7% higher than in 2024. But CBS said consumer confidence has now been negative for more than six and a half years, with geopolitical tensions, elevated inflation and other uncertainties all likely factors.