Construction output in the Netherlands grew by nearly 4 percent in 2016, and the forecast for 2017 is 3.5 percent growth, falling slightly thereafter.
The recovery in the construction sector is still one-sided, with the residential building market as the main driver of growth. Significant vacancy in office and retail properties is keeping the commercial construction sector subdued for now.
The residential sector grew 7 percent in 2016 and is forecast to grow by 6.0 percent in 2017. The new-build residential sector is a major driver of growth, but the construction of new homes is now being curbed by a decline in permits issued. Renovations grew by a modest 2 percent in 2016, but this rate is expected to increase over the long term.
Central government spending on regional infrastructure has fallen and towns are suffering from a lack of public funds available. Nevertheless, contractors are gaining valuable experience in the Public Private Partnership model as a way of providing construction investment in large projects.
The economy is growing at around 1.5 percent, driven by confidence and household spending. Strong housing demand will continue to drive residential construction growth. The pipeline for non-residential construction projects should grow during 2017 in areas such as energy, telecommunications and transport.