Netherlands market intelligence report 2019
In the Netherlands, the exceptionally high increase in construction costs is starting to level off. Yet skills shortages and persistent constraints on capacity are leading the industry to post recessionary resourcing challenges.
Construction sector overheating
Construction is the fastest-growing sector of the Dutch economy and is now at a point of overheating. 4.5 percent growth was achieved in 2018 with a similar figure expected for this year.
The huge demand for building works has had an impact on the viability of projects. Some tenders are failing and projects are being put on hold or stopped altogether because they are no longer affordable.
Although construction costs have been rising rapidly, with an 8.63 percent rise in 2018, they are expected to peak by the end of 2019.
The Dutch economy is in good health overall, but for the second year growth is expected to fall. The stuttering global economy has led to the forecast being revised down from 2 percent to 1.4 percent.
The economy should expand more moderately in 2020 as domestic demand eases and the Eurozone recovers.
Order books remain healthy and tender prices continue to rise as capacity constraints persist and the industry skills shortages fail to be addressed, leading to post recessionary resourcing challenges.
In the current climate construction companies are unwilling to take on risks in the manner they did so in the past.
The market has changed and the need to keep abreast of revised strategies and approaches to address this remain ever present. In this environment teams need to be well resourced, maintain good records and administer contracts appropriately to manage risk and ultimately deliver projects efficiently.
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