ABN Amro expects the construction sector to shrink

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Due to the rapidly rising interest rates, inflation and expensive materials, it seems that it will be a tough period for the construction sector. This is evident from a report by ABN Amro.

The sector closed the last quarter of last year with 2.3 percent growth compared to the third quarter. But it looks like this year will turn out worse for the sector. ‘The rise in interest rates has caused a drop in demand’, says Paul Bisschop, construction sector economist at ABN Amro. He speaks of a bridging period, during which construction and land prices still have to be adjusted to the more expensive financing.

The coming period will be tough for the construction sector. (ANP / Jeffrey Groeneweg)

Different sectors

ABN Amro’s prognosis does not show contraction everywhere in the sector. Various subsectors are doing well within the construction industry, such as the installation sector. ‘The traditional core subsectors are not doing as well,’ says Bisschop. This is mainly due to the problems surrounding new construction. ‘But investments in renovations or renovations also remain strong in those sectors. There the demand remains good instant.’

Related industries

The related subsectors, in particular installation companies and engineering firms, show positive figures in the bank’s forecast. ‘Of course, that has everything to do with the energy transition and the sustainability task, from which many orders flow,’ says Bisschop.

Architects are at the front of the construction chain and are most affected by orders that come to a standstill in the sector. The prognosis therefore shows that in 2023, architects will have the hardest time compared to other sectors in the construction industry.


‘Last year was still quite a good year in the construction sector,’ says Bisschop. ‘In that respect it is not surprising that a downturn is now imminent.’ In addition, Bisschop thinks that the downturn seems to be not too bad. There is quite a demand for construction projects, but only less for new construction.


Minister Hugo de Jonge’s plans for the housing shortage will not sufficiently save the stagnation in construction, as it currently stands. ‘De Jonge is busy realizing flexible homes, which will help the housing shortage, but that won’t help the construction industry much.’ It remains to be seen whether the measures that De Jonge will take in the near future will be able to help the construction sector.

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