Our comprehensive assessment of the Netherlands' operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect the Netherlands, as well as the latest industry developments that could impact the Netherlands' 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 the Netherlands before your competitors.
Netherlands Country Risk
The Netherlands' economic growth will be supported by nascent recoveries in the domestic housing and labour markets. However, crushingly high levels of household indebtedness will prevent households harnessing growing eurozone growth momentum as much as other countries in the bloc.
The coalition government's ability to push through a front-loaded austerity programme and a raft of labour market reforms will contribute to the Netherlands' fiscal accounts remaining among the healthiest in the eurozone.
Major Forecast Changes
Supply side disinflationary pressures will boost household purchasing power. To that end, we have notched up our headline growth forecasts by 0.2 percentage points for both 2015 and 2016 to 1.6% and 1.8% respectively....
Netherlands Industry Coverage (11)
BMI maintains a nominally bullish outlook on autos sales in the Netherlands in 2015, forecasting a 3.3% uptick in volumes over the full year. This comes on the back of several years of sustained declines in vehicle sales volumes and low base effects from 2014. BMI maintains a relatively bearish outlook on the country's economic growth prospects for 2015, and this is weighing on autos sales as consumers and businesses delay purchasing decisions.
Autos production in the Netherlands remains limited. Volumes are low, and few companies maintain facilities in the country. Since 1999, vehicle production in the country declined almost every year up to 2011; we believe that the increase seen in 2013 (the latest figures available at the time of writing) and over our five-year forecast period to 2019 will be partly due to pent-up demand in the market, rather than a true recovery, and the sector...
Food & Drink
Netherlands Food & Drink
BMI View: The Dutch economy has entered a cyclical growth upswing. Consumer spending, which has been a drag on growth over the past few years, will help drive a well-balanced growth acceleration over the next two years, supported by rising house prices and strong disposable income gains. The boost to household purchasing power of cheap energy prices has effectively acted as a tax cut for consumers, boosting consumer confidence and propensity to spend.
Headline Industry Data (local currency)
2015 per capita food consumption growth: +1.1%; forecast compound annual growth rate (CAGR) 2014 to 2019 = +2.5%.
2015 alcoholic drink volume sales growth: -0.2%; forecast CAGR 2014 to 2019 = -0.1%.
2015 soft drink value growth: +1.7%; forecast CAGR 2014 to 2019= +2.8%....
Netherlands Freight Transport
BMI View: During the course of 2015, there will be a broadly similar level of performance growth across the different freight modes in the Netherlands. The annual outperformer in growth terms is poised to be rail freight (3.95%), while road freight brings up the rear with year-on-year (y-o-y) gains of 2.20%. The key factors underpinning these forecasts in 2015 are the facts that the Netherlands' road and rail networks are well-developed and crossing European borders for business can be conducted quickly and efficiently.
Total trade in real terms is pencilled in to grow by 1.00% in 2015, a figure we see growing over...
BMI View: The Netherlands will remain one of the tougher European insurance markets to penetrate over the next few years as a highly competitive environment coupled with relatively modest growth in written premiums limits the opportunities for new entrants to gain a foothold. However, the non-life sector, which is the less consolidated of the two segments, will continue to offer some scope for growth, especially in the country's sizeable health insurance market, which is among the largest in the developed world.
The insurance sector in the Netherlands is among the most developed in Western Europe with both the country's life and non-life sectors home to a number of leading multi-brand firms, many of which have a significant international reach. However, as a result of this, both markets are relatively consolidated, particularly the life segment, where the six largest providers...
Netherlands Medical Devices
BMI Industry View : The Dutch medical device market is expected to expand at a subdued rate over the next five years with a US dollar CAGR of 3.2% forecast for the 2013-2018 period. Despite downward pressure on costs, health expenditure is forecast to grow steadily due to the needs of the rising elderly population and this will be a primary driver in the market, although low economic growth and the austerity programme proposed by the new coalition government are likely to hold down growth rates. The operating environment within the healthcare sector is set to become even more competitive as a result of the government's latest reform programme, although this should favour more innovative forms of technology that offer cost saving features, particularly given the Health Ministry's proposals to...
BMI View: After back-to-back years of volatility in the Dutch metals sector, 2014 looks to have laid the foundation for a prolonged period of stability in terms of both production and consumption. This positive momentum in the sector is set to continue through to the end of our forecast period in 2018. BMI expects steel to continue to dominate the country's metals industry; however, we see no significant new investment in the sub-sector over the coming years. Tata Steel, the largest producer in the country, is facing up to an increasingly hostile and competitive operating environment, with cheap steel and aluminium being exported from China. Nevertheless, opportunities remain in high-quality steel, of which the Netherlands is a key producer.
Long-Term Growth In Output
After posting a contraction in both production and...
Oil & Gas
Netherlands Oil & Gas
BMI View: Strong legal, political and social pressures will see large gas production cuts at the key Groningen gas field from 2015 onwards. This will greatly reduce the Netherlands' role as a key swing gas supplier to Western Europe over the decade as early as 2015.
Although there are considerable downside risks over the short term, Dutch petrochemicals still offer some distinct competitive advantages over the medium-to-long term. Dutch petrochemicals production has several distinct advantages that should help it maintain its regional position: high level of integration, economies of scale and diversity of the product slate, according to BMI's latest Netherlands Petrochemicals report.
In 2014, the Netherlands had capacities of 3.98mn tonnes per annum (tpa) of ethylene, 675,000tpa of polyvinyl chloride, 95,000tpa of polystyrene, 1.9mn tpa of polyethylene, 780,000tpa of polypropylene and 450,000tpa of polyethylene terephthalate.
The rubber and plastic production index recovered strength in 2014 as manufacturing returned to growth with an average of 1.6% growth in 9M 2014, compared to -1.0% in 2013. Chemicals grew 2.1% while rubber and plastic rose 3.7% on...
Pharmaceuticals & Healthcare
Netherlands Pharmaceuticals & Healthcare
BMI View: The Netherlands has a well-developed healthcare sector and a highly competitive pharmaceutical industry. With the Dutch economy entering a cyclical growth upswing, we expect higher consumer spending will provide a small boost to pharmaceutical sales in the near term. We forecast the pharmaceutical market will return to growth in 2016, the first time since 2011. Over the long term, medicine demand will be driven by the country's ageing population. However, market potential will continue to be dampened by the patent cliff, rising use of cheaper generic products and further drug price restrictions.
Headline Expenditure Projections
Pharmaceuticals: EUR5.92bn (USD7.93bn) in 2014 to EUR5.83bn (USD6.41bn) in 2015; -1.5% in local...
BMI View : Although growth remains sluggish in 2015 compared to previous years, our medium-term outlook has been improving. Both wind power and biomass have received new impetus through the offshore wind power bill and the plan to co-fire 10% of all coal power plants through biomass by end-2015, respectively. As doubts over the country's ability to reach its 2020 targets continue, ongoing long-term government subsidies and new reforms for the wind sector are efforts encouraging a range of potential investors and we expect to see solid gains in the market.
The lowering of renewable energy targets by the Dutch government from an initial 20% of the country'...
BMI View: Although the Dutch market is very mature and past the saturation point in 2011, this market is surprisingly dynamic, with two new mobile operators launching their services in H214/H115. The roll out of 4G LTE services provides some uplift to the mobile and broadband markets, but essentially operators are now cannibalising an existing audience. This is evident as the MVNO's are eroding the market shares of traditional operators. In the wireline sector, convergence has been a key theme over the last year.
It appears that the decline of the mobile users decelerated in Q414 and the subscription base totalled 18.361mn in Q115, down 1.5% y-o-y but up very slightly at 0.1% q-o-q. BMI...