Insight into Construction in the Netherlands by the European Construction Sector Observatory
The Dutch construction sector was in recession until 2014, as a result of the economic crisis. Productivity fell by 22.4% between 2008 and 2014. Between 2008 and 2013, employment declined by 12.1% and turnover fell by 14.6%. In parallel, construction costs and market competition increased. As a result, Dutch construction companies found it harder to compete and were forced to lower their prices in the attempt to remain competitive. Between 2008 and 2014, the sector also recorded falling investment in construction (-28.7%), housing (-43.7%), and non-residential and civil engineering (-13.9%). Similarly, the housing market experienced a fall in demand since the crisis, with the house price index decreasing by 19.5% over 2008-2013.
Positive GDP growth in 2014 marked a turning point for the national economy and resulted in improved business confidence in the construction sector. Increasing urbanisation, low mortgage rates and rising incomes have helped to strengthen household purchasing power. These factors have been driving the recovery of the housing market since 2014, both in terms of house prices and property sales. Demand is growing, but supply is lagging behind. The construction permit process is too slow and is hindering the supply of new housing. By 2020, there is expected to be a housing shortage of 300,000 units.
One policy measure that is intended to stimulate and support improvements in housing quality and the housing market is the Dutch ‘As-Built File’ (Opleverdossier) proposal. The ‘As-Built File’ describes the quality condition of buildings and functions as a maintenance manual. The aim of the building file is to inform homebuyers about the property they are interested in purchasing, and provide local authorities with reliable information to inform the development of policies on housing quality. It is also intended to guide homeowners on their responsibility for ensuring housing quality.
The Netherlands is a global leader in energy efficiency in the built environment and has a wide range of schemes in place to stimulate efficiency improvements. The EUR 600 million National Energy Saving Fund provides homeowners with low-interest loans to finance energy-saving interventions through programmes such as the Energy Saving Loan.
The Energy Leap (Energiesprong) scheme is an innovative market development programme that was launched in 2010 with initial government funding of EUR 50 million to develop attractive and viable net-zero energy retrofit solutions for the mass market by 2020. It creates demand and market opportunities for large-scale retrofits of homes, offices, schools and care homes by creating market-driven partnerships between housing providers, building owners, component suppliers (supply chain) and contractors to design and deliver fully integrated whole building energy saving retrofit solutions. This revolutionary approach has real potential to provide affordable market-driven energy saving building retrofits at scale and it has already been exported internationally in Europe and beyond. The Dutch scheme has agreed a deal to renovate 111,000 housing association homes, backed by EUR 6.6 billion in upfront capital provided by the WSW social bank.
The Netherlands also operates a number of schemes to provide financing, advice and networking opportunities to help SMEs to export and expand into foreign markets. Examples include the EUR 102 million Dutch Trade and Investment Fund (DTIF) and a EUR 3.8 million internationalisation voucher scheme.
The outlook for the Dutch construction sector is positive. The sector’s recovery will be strongly underpinned by the housing sector. However, recovery is constrained by a shortage of skilled workers, low numbers of students in related subjects, and an increasing proportion of older workers nearing retirement age. More practical vocational education and training (VET) could help to tackle the shortage of skilled tradesmen such as bricklayers, roofers and plasterers.
The European Construction Sector Observatory is helping the construction value chain to confront the economic and social challenges that impact the construction industry. Through regular analysis and comparative assessments, the initiative aims to inform European policymakers and industry stakeholders on the market conditions and policy developments in the European construction sector. The key outputs of the Observatory include Country Fact Sheets that profile and analyse the construction sector in each Member State, Policy Fact Sheets on key sector-related policies in each Member State, and a series of Analytical Reports on the implementation of Construction 2020 Strategy objectives.
Visit the Observatory website to download analytical fact sheets and reports on the Netherlands and other Member States, and gain insight into the European construction sector.