AMSTERDAM, Feb 13 (Reuters) - The Dutch economy was in recession in the fourth quarter, shrinking 0.9 percent from the previous three months, the biggest quarterly drop since the early 1980s, data showed on Friday.
"It appears that businesses and consumers were paralysed, caught like rabbits in the headlights," said Statistics Netherlands economist Michiel Vergeer.
The fourth-quarter gross domestic product (GDP) figure was slightly better than economists had expected. But previous quarters were revised down to show a contraction, which means that the Dutch economy has been shrinking since April last year.
"What is striking is that the employment numbers are strongly lagging economic growth. Employment still increased in the fourth quarter, although we now have three consecutive quarters of contraction in the Netherlands," said Fortis Bank economist Aline Schuiling.
"This also had a positive effect on consumer spending. I expect that this number will drop in the near term."
The Dutch contraction was less severe than the 2.1 percent quarter-on-quarter fall Germany reported earlier on Friday, while the French economy contracted 1.2 percent and Italy's by 1.8 percent.
Statistics Netherlands data showed that Dutch exports fell faster than imports in the fourth quarter compared with the third, and private investment declined by 4.4 percent. Private consumption rose 0.5 percent quarter-on-quarter.
Indicating a sharp deterioration in business conditions for manufacturers, the Dutch Purchasing Managers' Index (PMI) has been below the neutral mark that separates growth from contraction for seven straight months. It touched a fresh record low in January. (Reporting by Niclas Mika, Harro ten Wolde, Gilbert Kreijger and Aaron Gray-Block; editing by David Stamp)