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
With the passage of legislation becoming increasingly obstructed by the Dutch government's loss of a majority in the Senate, the government is unlikely to serve its full term and we expect snap elections by year-end. The ruling VVD party is still likely to remain at the helm of the Dutch government, but supported by a more stable centrist coalition.
We have revised up our forecast for real GDP growth in the Netherlands as H115 readings for private consumption and exports have been stronger than we initially anticipated. However, the reduction of gas production at the Groningen field will partially offset the positive impact of stronger external demand from the eurozone.
Major Forecast Changes
We have notched up our headline growth forecasts by 0.2 percentage points...
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 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.
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%.
2015 mass grocery retail sales growth: +4.2%; forecast CAGR 2014 to 2019= +4.7%.
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 size and maturity of the Dutch insurance sector is proving to be an obstacle, with the industry bearing the brunt of the slow growth seen across the wider eurozone insurance sector. The life market in particular is witnessing the effects of weak household spending and limited savings and investments activity. This situation is further reflected in certain segments of the non-life market, including the motor vehicle and property sub-sectors. However, the overall expansion in non-life premiums will be sustained by the health insurance market, with demand for health covers being supported by the shift from state-funded healthcare services to the private provision of health services.
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 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.
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 : While growth is expected to remain sluggish in 2015, with only a slow uptick forecast for 2016, our outlook for the Dutch renewable energy market in the medium term continues to improve. Particularly wind power is expected to see an increased development following the new offshore wind power bill. As doubts continue over the country's ability to reach its 2020 targets, the prime minister also held out the prospect of an increased SDE+ budget for 2016.
The lowering of renewable energy targets by the Dutch government from an initial 20% of the country's total energy mix by 2020 to 14% paired with reduced FiT payments in 2010 had brought fears over the government's commitment to the country's energy transition. Governmental incentives remain strong, however, planning to reach the 16%...
BMI View: Convergence and bundling will drive down overall subscription numbers in the Netherlands, implying a saturated market lacking investment opportunities. Tele2 and Ziggo 's 4G launches show there are ample rewards for industry players. However, a successful mobile service must be married with a strong wireline offering. Thus, Tele2 may be found to be lacking, leaving Ziggo to capitalise on rising demand for mobile- and TV-led converged services.
|Multi-play And Multi-User Packages Behind Falling Subscriber...|