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
Real GDP growth in the Netherlands in 2016 will be driven mainly by domestic demand, bolstered by a fiscal stimulus package, and a sustained recovery in the housing market. Net exports will make only a modest contribution to growth due to stagnating external demand from the eurozone and lower gas export volumes.
The Netherlands is likely hold an early parliamentary election in 2016, as the ruling centre-right VVD seeks to gain new coalition partners, which would help it regain its lost majority in the upper house. The rising popularity of ultra-nationalist PVV will serve to draw other centrist parties together, and boost their willingness to cooperate in forming a coalition government, while isolating the PVV from power.
Softening of eurozone demand poses downside...
Netherlands Industry Coverage (21)
BMI View: Total vehicle sales will be dominated by passenger vehicle figures, which will be driven by low base effects and an uptick in household consumption. However, total sales volumes will grow to 571,316 units in 2020, although this is below the peak level of 627,580 units experienced in 2011.
|Passenger Car Sales Numerically Leading The Way|
|Total Vehicle Sales And Passenger Vehicle Sales|
|f = BMI forecast. Source: National Sources,BMI|
A proposed bill...
Food & Drink
Netherlands Food & Drink
BMI View: The Dutch food and drink industry will expand at a modest pace throughout our forecast period to 2020 on the back of existing sector maturity, providing only limited opportunities for investors. Demand for convenience and rising health awareness will affect consumption patterns.
|Food & Drink Spending|
|f = BMI forecast. Source: BMI, national statistics|
Latest Trends & Industry Developments
Food sales will experience...
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: Growth in the Netherlands' construction sector is coming in as expected with a number of transport, utilities and non-residential projects underway, supporting strong short-term growth in construction industry value. Few new projects are entering the pipeline, leading to slower growth over the remainder of the forecast period, though we do note a potential uptick in growth as new renewables projects are planned in order to meet ambitious carbon reduction targets.
Latest Updates And Structural Trends
The Netherlands' construction sector could benefit from regional financing. The European Investment Bank is considering plans to offer EUR100mn (USD109.3mn) in project finance for the A6 Almere Havendreef-Almere East road concession which will entail the design, build,...
BMI View: The Netherlands offers one of the largest, most mature insurance markets in Europe, with total gross life premiums written of EUR70.7bn in 2015. However, an adverse economic environment, as well as ongoing competition, is expected to have a knock-on effect on overall demand, and as such, we expect growth rates to linger in the low single digits for the short to medium term. Growth will be driven predominantly by the non-life segment, which is heavily dominated by health insurance. The life market is expected to continue to shrink owing to customers' preference for banking and retail products.
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: We have increased our 2016 tin price forecast to USD16,500/tonne owing to a stabilisation in the Chinese economy over Q116 that has boosted all industrial metal prices significantly over January-April. While we expect consolidation over the remainder of 2016, tin prices will continue to recover beyond 2016 as the global market posts sustained market deficits and inventories dwindle.
BMI view: We have revised our aluminium price forecast from USD1,575/tonne to USD1,600/tonne in 2016, as the tightening market provided an earlier than expected floor in Q116. Aluminium prices will gradually edge higher as the global market moves into a deficit by 2018.
BMI View: Despite the strong H116 iron ore price rally, prices will edge lower due to weakening Chinese consumption over the latter half of 2016. From 2017 onwards, iron ore prices will remain subdued as iron ore prices remain under pressure from an over-supplied seaborne market, driven by strong production growth in Australia and Brazil, and weak consumption growth in China.
BMI View: Nickel prices will bottom in 2016 as weak production drags the global market into deficit. For instance, we expect Chinese imports of nickel to grow over the coming quarters. Prices will begin 2016 weaker than we had previously expected and we have thus revised down our 2016 average price forecast to USD9,000/tonne from USD10,500/tonne.
BMI View: We have revised down our average copper price forecast for 2016 to USD4,900/tonne. We expect prices to find a floor over the first half of 2016, and begin to stabilise thereafter, supported by production cuts and modest consumption growth.
BMI View: We have raised our gold price forecast for 2016 to USD1,275/oz and have a new five-year price target of USD1,400/oz. We have turned more positive towards prices due to rising inflation pressures and our view that real rates will remain depressed in developed markets beyond 2016. A modest rise in prices will be insufficient to reverse the trend of weak mine investment and industry consolidation.
BMI View: Global steel prices will remain subdued due to a persistent steel oversupply over the coming quarters. From 2017 onwards, steel prices will gradually edge higher as the global steel surplus will narrow due to Chinese supply moderation.
BMI View: We maintain our average zinc price forecast for 2016 of USD1,750/tonne. We expect zinc prices to reach a floor over the first half of 2016, and begin to stabilise thereafter, as production cuts shift the market to a deficit.
BMI View: Lead prices will gradually edge higher as the global lead market will shift into deficit by 2017 as production growth will slow over the coming years.
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. 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 value of the Dutch pharmaceutical market will see yet another year of contraction in 2016, although we expect a return to growth - albeit marginal - in the following years. A relatively low risk environment and a well establish healthcare sector, thanks to high government expenditure, coupled with an aging population will aid in the recovery of the market. However, the country's ever-growing healthcare bills will increase the likelihood of the government implementing further cost-containment measures.
Headline Expenditure Projections
Pharmaceuticals: EUR5.80bn (USD6.38bn) in 2015 to EUR5.80bn (USD6.20bn) in 2016; -0.1% in local currency terms and -2.8% in US...
BMI View: Investment in the Dutch power sector will remain focused on non-hydropower renewables after the tenders for offshore wind farms was permitted to proceed. Policy uncertainty over the future of coal-fired power will deter thermal power investment. Generation increases will mostly be offset by ageing power plants being phased out.
|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 and devoid of organic subscriber growth. 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|