Our comprehensive assessment of Belgium's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Belgium, as well as the latest industry developments that could impact Belgium's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Belgium before your competitors.
Belgium Country Risk
Belgium's economy will expand at a steady pace over the coming years, marginally lagging behind average eurozone real GDP growth rates.
This relatively poor outlook is a reflection of the likely impact of government fiscal austerity measures and the short-term negative impacts of structural labour market reforms.
These same reforms will ensure that Belgium makes up some competiveness gains against regional peers over the long-term, which will be good for inward investment and the country's growth outlook to 2025.
The centre-right government of Charles Michel is unlikely to regain popular support lost to rivals in recent quarters, as it struggles to develop coherent responses to the elevated terrorist threat and unrest caused by its labour market reforms.
Belgium Industry Coverage (10)
BMI View: We expect an improving business environment to lend support to both passenger car and commercial vehicle sales in 2016. We are targeting 3% sales growth for the Belgian new vehicle sales market in 2016.
|Passenger Car And Light Commercial Vehicle Sales|
|f = BMI forecast. Source: FEBIAC, BMI|
Commercial vehicles are outperforming cars as the Belgian economy regains strength.
New model launches from leading players are bolstering...
Belgium Freight Transport
BMI View: Belgium's freight transport sector will continue to grow in 2016 as the domestic and wider economic climate is strengthening, improving trade and consumer demand. Real GDP growth is forecast at 1.6% in 2016, up from the previous estimate of 1.3%. Air freight will witness the sharpest increase, due to an increase in output in the pharmaceutical sector as well as from demand for high value consumer goods. Road and rail freight will also have steady growth due to small increases in heavy industry output. Road freight will continue to dominate the freight sector in Belgium given the established nature of the freight mode with developed highways and trans-border connectivity.
Belgium will see steady economic recovery over the medium term, benefiting the freight sector. We expect real GDP growth to be 1.3% in 2016 and forecast that the economy will expand by an annual average of 1.5...
BMI View: Belgium's construction sector is well developed, with extensive transport, energy and residential/social infrastructure networks already in place. As a mature market, growth potential is somewhat stifled and the ongoing government austerity measures mean we do not currently expect any major new projects to enter the pipeline in the short- to medium term. Despite these headwinds, Belgium's construction sector will maintain some level of growth throughout the forecast period, bolstered by regional funding and the successful utilisation of public-private partnerships in a number of sectors.
Latest Updates And Structural Trends
Residential and non-residential construction have seen an uptick in early 2016, with the number of building permits in both sectors increasing in...
BMI View: Belgium's insurance market is mature, with high rates of penetration and density in both the life and non-life sector. As a well-developed market where levels of coverage are high, growth is expected to be slow and reliant primarily upon wider economic growth in the country and improvements in household income and private consumption rates. Despite the expected slow growth in premiums, Belgium's open regulatory environment does create an attractive investment environment, and in future we could see some consolidation among the smaller domestic providers which may struggle to keep up with enhanced capitalisation requirements under the Solvency II system, creating opportunities for overseas investors to enter the market via local mergers and acquisitions.
Belgium Medical Devices
BMI View : The Belgian medical device market continues to perform better than average for the region, but we anticipate a slower rate of growth than in previous years. The health sector is set for a further period on austerity following the government's decision to cut the growth target for health insurance spending from 3.0% to 1.5% in 2015 and to just 0.75% in 2016. At the same time, the rising health needs of the expanding elderly population and the drive to improve the care of patients with chronic conditions will continue to drive a steady expansion of the medical device market.
Oil & Gas
Belgium Oil & Gas
BMI View: With no upstream prospects, Belgium will remain heavily reliant on imported supplies of both liquids and gas. Natural gas consumption will be weak due growing nuclear and renewable generation in the power sector. Meanwhile, the refining sector will perform well as efficiency improvements and low oil prices increase the competitiveness of its downstream facilities.
Belgium's export sector has traditionally been dominated by relatively low technology goods supplying downstream processors in Germany and elsewhere. However, increased investment throughout the value chain, particularly in products utilised by the automotive industry, will improve the external competitiveness of the petrochemicals sector. The Belgian petrochemicals industry has managed to buck the trend in Western Europe with a rise in capacities in some segments.
Chemicals output declined 0.4% y-o-y in the first eight months of 2015, putting the sector on course for a fourth year of recession. Meanwhile, rubber production rose just 0.8%, although this came after a robust performance in recent years. Plastic output grew 3.1%, a rate of growth was more than double the level achieved in 2014 and considerably better than previous years.
Evonik's addition of 100,000tpa of butadiene...
Pharmaceuticals & Healthcare
Belgium Pharmaceuticals & Healthcare
BMI View : Belgium offers a stable pharmaceutical market with high per capita spending on medicines. However, drugmakers will increasingly find the government less willing to reimburse expensive, innovative medicines as it struggles to hit its fiscal targets.
Headline Expenditure Projections
Pharmaceuticals: From EUR5.84bn (USD6.47bn) in 2015 to EUR5.89bn (USD6.30bn) in 2016; +0.9% in local currency terms and -2.6% in US dollar terms.
Healthcare: From EUR44.96bn (USD49.87bn) in 2015 to EUR46.13bn (USD49.36bn) 2016; +2.6% in local currency terms and -1.0% in US dollar terms.
BMI View: As nuclear capacity is decommissioned throughout our 10-year forecast period, Belgium will become increasingly reliant on electricity imports. Despite strong growth being evident in non-hydropower renewable capacity, this will not be enough to cover the deficit left by nuclear power. Construction of an interconnection line with the UK will help facilitate the necessary imports.
BMI View: Belgian operators are looking to upgrade and upsell new services to their customers, recognising that widening is over and that deepening must become a core strategy. Convergent and 4G services have driven the market in 2015, but there remain some strong opportunities as many users are still on basic services, whether DSL or mobile-voice only. Mobistar's launch of fixed services is necessary in a fully converged market, but it remains secondary to its core mobile service. Convergence will help its postpaid service, but the carrier will only be able to compete on price as a wholesaler, if it does not decide to acquire one of the remaining cable players in the market. The lack of fibre will hinder the fixed broadband market in the long term.
|Improving Uptake Of The Most Advanced...|