Rabobank Sector Forecasts for 2016: Growth in business sectors to continue, but no guarantee of success

The economic recovery will continue in 2016 and virtually all business sectors in the Netherlands are expected to show growth. Volume growth will however not guarantee success for businesses, as shown in the Sector Forecasts for 2016 published by Rabobank today. The sectors that benefit the most will be business services, construction and hospitality and recreation, for which Rabobank expects to see volume growth of 4.2%, 4.0% and 3.0% respectively this year. Automotive will be the only sector to contract (-1.0%) after the tax-driven increase last year.

Eric Saris, Director of Businesses at Rabobank:‘Fortunately, growth is continuing in virtually all business sectors, although we have moderated our forecasts somewhat in comparison to our expectations six months ago. And growth in the sector is no guarantee that a business will succeed. Prices are still under pressure and it is becoming harder to hold on to a competitive advantage. Entrepreneurs looking to benefit from the economic recovery need to think on a bigger scale and look for a themed cooperation with chain partners or newcomers to their industry. They can use their strengths to strengthen each other and continue to attract customers with a distinctive product or service.’ Entrepreneurs can enhance their businesses’ flexibility through smart use of software and technology as a service (‘SaaS’) and flexible personnel.

Business services

Business services is benefiting from the increased activity in the trade and industry sectors. Business services providers such as employment agencies, ICT companies and the growing group of self-employed persons without personnel are helping companies to take advantage of the changes and offer the specialist expertise that they need. We expect the fastest growth to be in the market for flexible workers and ICT. Besides growth, services providers still need to innovate. They operate in a fast-moving environment due to changes to legislation and regulation, tougher market conditions and technological developments.

Construction

The rapid growth in construction seen last year (8.2%) is set to flatten off this year at 4%, but it will still be the leading sector in terms of volume growth. The housing market, including new-build, is benefiting the most. The growth is happening mainly in the Randstad, the urbanised area in the western part of the Netherlands. The recovery in the civil engineering segment is still fragile, selective and spread across various regions. Further innovation of products and services is needed to strengthen growth in the construction sector. Important areas where innovation is needed include sustainable construction, and the consumption and reuse of building and demolition waste.

Hospitality and recreation

2016 promises to be another good year for hospitality and recreation. Both consumers and businesses are spending more on this sector. The Netherlands is a hot spot for international tourists and its popularity is increasing year on year, as shown by the rising number of international visitors. The growth in hospitality and recreation is happening mainly in the tourist-oriented and economically strong regions around Amsterdam, the Randstad and the coastal areas. This is still a challenging market for businesses: what is ‘in’ today can be ‘out’ tomorrow, and newcomers to the industry like supermarkets and AirBNB are raising the level of competition.

Non-food retail

Non-food retail is growing in volume, but revenue growth is lagging due to price pressure. Home furnishings businesses are benefiting the most. Clothing, sports and footwear retailers continue to struggle and the effect of online retailing is very visible. This is leading to the disappearance of more standard retail formulas and an increasing amount of vacant retail space. Rabobank expects shopping areas to become more compact and more focused on creating an experience, with greater attention to online customer service and customer retention. The ‘local heroes’ will have to make shopping streets and going out shopping for the day appealing again. These are the businesses that will attract consumers with local knowledge, a high goodwill factor and a flexible product offering.

 

tabel sectorprognoses vj2016 EN

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