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 will most likely hold general elections in H216. The rise in the popularity of far-right political parties, as well as uncertainty over potential coalition partners are the main factors behind the delay in the early ballot.
While the recovery in the Dutch economy remains on track, we highlight key risks stemming from the vulnerabilities of its mortgage market. For now, however, our core scenario remains that these risks will be contained due to the strengthened banking system and the strong fiscal position of the sovereign.
Softening of eurozone demand poses downside risk to our forecast for real GDP growth to accelerate in the Netherlands in 2016.
Netherlands Industry Coverage (13)
BMI View: Total vehicle sales are forecast to grow 3.5% in 2016, supported by low base effects and recovering household consumption.
|Passenger Car And Light Commercial Vehicle Sales|
|f = BMI forecast. Sources: Rijwiel & Automobiel Industrie, ACEA, BMI|
Food & Drink
Netherlands Food & Drink
BMI View: The Dutch economy will remain in a cyclical upswing, driven by ECB quantitative easing, fiscal expansion by the government, strong private consumption, and strengthening external demand. We forecast real GDP growth to expand by 1.9% in 2016, up from an estimated 1.8% in 2015, driven mainly by private consumption. Food consumption will benefit from this growth, but the Netherlands remains a highly developed market. This means that BMI is currently predicting that Dutch food consumption in value terms will increase only moderately over the forecast period.
Headline Industry Data (local currency)
2015 per capita food consumption growth: +1.1%;...
Netherlands Freight Transport
BMI View: Over 2015, the Netherland's freight industry will post good growth, with rail freight seeing the strongest growth. In particular rail and road freight will benefit from rising domestic consumption, growth in Germany's economy and strong fuel demand across Europe. Over the medium term, we forecast rail to increase its market share as the sector will benefit the most from investments into European transport infrastructure and the removal of the sugar production quota in 2017. Air freight will post good growth but will continue to play a negligible role in the freight mix over our forecast period up to 2019.
Total trade in real terms is forecast to grow by 1.00% in 2015, a figure we see increasing over the medium...
BMI View: The Netherlands will be an attractive construction market over the next three years, driven by investment opportunities in non-residential building sector. Over the longer term infrastructure opportunities will be present, primarily in the power sector, as the country pursues an ambitious renewable energy strategy.
Latest Updates And Structural Trends
The Netherlands's construction industry is expected to sustain strong growth in 2016 and 2017 - at 5.2% and 4.2% respectively - driven primarily by non-residential construction projects.
Investment in the country's refining sector is increasing, as investors seek to capitalise on strong margins and invest to secure long-term competitiveness.
BMI View: The Netherlands has one of the largest insurance markets in Europe, particularly in terms of health insurance, which accounts for the vast majority of the non-life sector. As a mature marketplace, growth opportunities are relatively restricted, particularly in the life sector, which continues to suffer from a lack of consumer confidence and limited savings and investment activity. We do expect to see some growth in household income over the forecast period, indicating increased capacity for spending on various insurable products and some impetus for premium growth in the non-life sector. However, the outlook will remain subdued overall, with growth rates lingering in the low single digits.
Netherlands Medical Devices
BMI Industry View : The medical device market in the Netherlands will continue to see above average growth within the eurozone. Despite downward pressure on costs, health expenditure is forecast to grow steadily due to the healthcare needs of the rising elderly population and this will be a primary driver in the market. However, the current austerity programme will hold down growth rates with the operating environment within the healthcare sector set to become even more competitive as a result of the government's latest reform programme. The drive for efficiency will favour more innovative forms of technology that offer cost saving features, particularly given the Health Ministry's proposals to support...
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 are and will continue to see large 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, with net exports nearly disappearing by the second half of our forecast period.
Dutch petrochemicals production is set for strong growth in 2016 following a disappointing 2015 when chemicals output fell 5.4% due in part to the shut-down of the Moerdijk cracker and associated butadiene production. The unit's resumption of activities should see it raise output to full operational capacity in 2016.
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.
The government's commitment to enhancing the business environment is reflected in its flexibility in modes of taxation on particular business operations. Financial incentives are also provided to promote research and development (R...
Pharmaceuticals & Healthcare
Netherlands Pharmaceuticals & Healthcare
BMI View: The Netherlands has a well-developed healthcare system due to generous public expenditure over the years. Despite newly introduced cost-cutting measures, government spending on healthcare will continue to increase in local currency terms, especially as the wider eurozone recovers. However, the country's aging population will put pressure on government finances over the longer-term, inevitably leading to further price caps on medicines.
Headline Expenditure Projections
BMI View: The Netherlands has a relatively mature power sector, that will experience slow power generation growth over the next five years as new capacity is offset by older power plants being phased out. The majority of growth will come from renewable power, especially wind farms, as the government tries to reduce emissions.
|e/f = BMI estimate/forecast. Source: EIA, National sources, BMI...|
BMI View: Convergence and bundling will drive down overall subscription numbers in the Netherlands, implying a saturated market lacking investment opportunities. However, the launch of the first PVNO by CGI and a Dutch utilities company will lead to increased competition in the Netherland's already thriving M2M market.
|3G & 4G Subscribers To Increase|
|Netherlands Mobile Market Forecasts|
|f = BMI forecast. Source: BMI, operators, ACM...|