Investments in AI boost global trade

The volume of Dutch goods exports was a substantial 7,1% higher in December than a year earlier. For 2025 as a whole, a 3,3% increase is projected for goods export growth, following a -1,8% increase in 2024. According to Statistics Netherlands (CBS), the strong figure in December was mainly due to machinery and petroleum products.

The strong growth in petroleum product exports is likely incidental, while I suspect that of machinery is more structural. The latter is partly, or perhaps even primarily, due to machinery related to the semiconductor industry, particularly that of ASML, BESI, and ASM.

The current strength of growth in that sector can also be seen in Taiwan's export figures. The value of Taiwanese exports in January was almost 70% higher than in January 2025. Exports to the US were even over 150% higher than a year earlier. Although Taiwan's January export figures are undoubtedly flattered by the fact that Chinese New Year falls very late this year, these are truly impressive figures. Incidentally, the growth in the value of imports, at +63,6% year-on-year, was not far behind.

The volume of industrial production in our country was only 1,1% higher in December than a year earlier, which is moderate compared to exports. There are significant differences between the various sectors. The following figure from Statistics Netherlands (CBS) shows that the mechanical engineering sector produced significantly more than a year earlier, while the chemical sector unfortunately produced considerably less. This continues a trend in the chemical sector that began in 2022.

There's obviously a strong correlation between production and exports. Anything you want to export must first be produced. Exports typically lag slightly behind production, but under current circumstances, I suspect production will pick up over the course of the year in response to the strong export growth.

Fewer bankruptcies
The number of bankruptcies in the Netherlands fell again in January. 12% fewer businesses went bankrupt than in January of last year. Even when comparing the number of businesses, there was a decrease. The highest number of businesses in the hospitality, manufacturing, transport, and storage sectors went bankrupt, relative to the number of businesses in those sectors. This is certainly nothing new, especially in the hospitality sector, where a relatively high number of businesses always close and start.

In the US, the labor market is the central focus. For some Fed board members, the weakening of the labor market, reflected in a decline in monthly job growth, is a good reason to advocate for further interest rate cuts. The problem, however, is that there are quite a few distortions, making the figures difficult to interpret. The abrupt change in immigration flows and the deportation of undocumented immigrants likely has a significant impact on the labor market figures. This has weakened the supply of labor, or if you prefer, the demand for jobs. Seen in this light, the lower number of new jobs may not be caused by lower demand for labor, but by a lower supply of labor. In that case, the reduced job growth may not be a sign of underlying economic weakness that should be addressed by an interest rate cut.

Furthermore, data collection problems arose due to the US government shutdown in October and November of last year. Because the US government recently shut down again, this time partially and briefly, the data collection and publication process has been disrupted again. Some economists believe that, as a result of all this, the figures may not accurately reflect reality.

Be that as it may, total US employment grew by a net 130.000 jobs in January. This figure significantly exceeded expectations, though it remains relatively modest compared to a few years ago.

Deregulation as a means
The Trump administration is focusing on deregulation and the reduction of the civil service, among other things. Similar sentiments are sometimes heard in the Netherlands, but they are not being implemented. The problem for the Trump administration is that it only has direct influence on the number of federal government employees. That represents only about 12% of all US government employees. Local governments account for 65% of all employees, and states for the remaining 23%.

The following graph shows that federal government employment has indeed declined under Trump. Incidentally, the two high peaks in the graph are caused by censuses, which the US government conducts every ten years in the absence of a civil registry. Hundreds of thousands of temporary workers are employed for this purpose. Incidentally, the census scheduled for 2020 was held slightly later due to the coronavirus pandemic.

The last graph shows that at the aggregate level—the federal government, states, and local governments combined—there has been a slight decline in the number of civil servants. The graph also suggests that nearly one and a half million civil servants lost their jobs during the coronavirus pandemic, and that it took almost four years for the number to return to pre-pandemic levels.

Closing
Against expectations, the growth of our goods exports is accelerating. This isn't unique; we're seeing it elsewhere in the world as well. Investments in AI seem to be responsible.

The growth of our industrial production is only moderate. The number of bankruptcies in our country is trending downwards.

Job growth in the US exceeded expectations in January, but interpreting the figures is even more difficult than usual due to various disruptions. What is clear, however, is that the number of civil servants is declining. How is it possible that they are doing this and we are not?

Hans de Jong

Han de Jong is a former chief economist at ABN Amro and now a resident economist at BNR Nieuwsradio, among others. His comments can also be found on Crystalcleareconomics.nl

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