Concerns about permits overshadow turnover increase in construction sector

- Advertisement -spot_imgspot_img

Turnover in the construction sector increased by more than 12 percent in the past quarter. That seems positive, but the reality is that there are great concerns about the number of building permits that have been granted. ‘It means that activity will decline, and construction could well get into trouble.’

The fact that the turnover figures are so positive has everything to do with the high production prices that could be passed on, and not because so many homes were added. The number of building permits granted fell by a quarter. And that can have negative consequences for business in the future.

‘It is not the case that those building permits immediately result in a home’, explains chief economist Peter Hein van Mulligen of Statistics Netherlands (CBS). ‘It usually takes about two years between the granting of the permit and the completion of the house.’

Turnover in the construction sector increased by more than 12 percent in the past quarter.  That seems positive, but the reality is that there are great concerns about the number of building permits that have been granted.  'It means that activity will decline, and construction could well get into trouble.'
Turnover in the construction sector increased by more than 12 percent in the past quarter. That seems positive, but the reality is that there are great concerns about the number of building permits that have been granted. ‘It means that activity will decline, and construction could well get into trouble.’ (ANP / Nico Garstman)

Van Mulligen adds that the construction sector not only builds new homes. ‘In the past quarter, for example, a lot was invested in installation companies that specialize in making all kinds of buildings more sustainable. These are not new homes, but the homes that do exist will be energy efficient.’

’28 percent fewer permits could also mean 28 percent fewer new homes in a few years’

Peter Hein van Mulligen, chief economist at Statistics Netherlands

Nevertheless, the decrease in the number of permits is cause for concern. Van Mulligen: ‘It will probably mean that a lot fewer homes will be built. A 28 percent reduction in permits could also mean 28 percent fewer new homes in a few years’ time. That does not fit in with the plans we all have, especially now that it is difficult for first-time buyers to find affordable homes in many places in the Netherlands. Then it won’t help that less will be built.’

Optimism

At the bottom of the line, however, the construction sector is in good shape, according to Van Mulligen. ‘If you ask the construction industry itself, they are far from dissatisfied, especially about their order book. On balance, it is the most optimistic industry in the world. The economic climate is slightly different, all companies in the Netherlands are pretty gloomy about that. This is probably due to the persistently high inflation.


- Advertisement -spot_imgspot_img
Latest news
- Advertisement -spot_img
Related news
- Advertisement -spot_img