In 2020, GDP (gross domestic product) in the Netherlands stood at EUR 727.0 billion, representing an increase of 9.4% compared to its 2010 level but a 3.7% decline compared to 2019.
The number of enterprises in the Netherland’s broad construction sector stood at 308,707 in 2020, representing an increase of 61.1% since 2010. In parallel, the volume index ofproduction in the broad construction sector grew by 27.7% over the 2015-2020 period.
As a result, total turnover in the broad construction sector amounted to EUR 168.4 billion in 2018, representing a growth of 23.4% over the period 2010-2018. It further increased to EUR 192.4 billion in 2020. This represents an increase of 41.0% since 2010 and 14.3% since 2018.
The gross operating rate of the broad construction sector, an indicator of the sector’s profitability, stood at 19.3% in 2018, above the 2010 level (15.8%) and also above the 2018 EU‑27 average (16.7%). The real estate activities sub‑sector was the most profitable, with a gross operating rate of 49.2%.
In terms of employment, there were 832,573 persons employed in the broad construction sector in 2020, a 10.8% increase compared to its 2010 level. This was mainly due to growth experienced in the architectural and engineering activities (+15.9%) and the narrow construction (+14.4%) sub‑sectors, during this reference period.
The number of households in the Netherlands reached 7.9 million in 2020, representing a growth of 8.2% from its 2010 levels. Fuelled by declining mortgage interest rates (2.7% in 2020 vs. 4.8% in 2010), housing loans granted also witnessed continuous growth over the 2010‑2019 period (+8.1%). These factors, combined with an increasing urbanisation rate and greater household income, contributed to a strong demand for housing, which in turn drove the housing index price up (+41.9% between 2015 and 2020).
The increase in housing loans has led to greater household debt in the Netherlands. The rising demand for houses was met by an increasing supply in housing stock as the residential building permits index grew by 18.0% in 2020 compared to the 2015 level.
However, the completion of new houses fell by 3.1% in 2019 to reach 69,322 units in 2020, representing a sharp drop to an average of 58,150 units per year over the 2010 2020 period. This is primarily due to post 2010 changes in the planning system, which also partly explains the rapid rise in house prices in recent years. The government aims to reduce the housing shortage in the Netherlands to 2.0% by 2035.
With regards to non-residential construction and civil engineering, in July 2020 the Dutch government announced that it is set to receive grants totalling EUR 82 million from the European Commission for the development of road, railway and water infrastructure projects. The government has also taken measures to ensure the continuation of construction and infrastructure works amid the COVID‑19 crisis. A special task force within the construction sector has been established to identify projects that can be brought forward or carried out on the short-term. An additional EUR 265.0 million has been assigned for these projects over the next two years].Notably, as of November 2021, the Dutch government had not yet submitted its national Recovery and Resilience Plan to the European Commission. However, the allocated funds for the Netherlands, should the country request them, amount to an estimated EUR 6 billion in grants and up to EUR 55 billion in loans.
Despite these developments, the Dutch construction sector is hindered by two major issues. Firstly, the Dutch construction sector faces a shortage of skilled workers. Secondly, the issue of late payment has become more problematic, especially since the onset of the COVID‑19 pandemic.
In 2020, late payments affected 47% of the total value of B2B invoices in the Dutch construction sector, compared to 35% in 2019. 42% of enterprises had to wait longer, up to 14 days past the due date on average, to turn overdue invoices into cash .
To summarise, governmental initiatives, coupled with positive forecasts related to construction performance indicators such as turnover and employment make the outlook of the Dutch construction sector optimistic. Moreover, government targets for reducing housing shortages and future infrastructure projects, are expected to generate further business opportunities for the sector.