Rabobank Sector Forecasts in 2016: Broad recovery, but not all businesses will benefit
OREANDA-NEWS. October 15, 2015. All business sectors in the Netherlands will grow in 2016, although this does not mean that life will be easy for business operators. This is the message of the Rabobank Sector Forecasts for 2016 that are published today. The Dutch economic recovery is on track, driven by rising exports, private investment and private consumption. The best performers will be business services, construction and wholesale, for which Rabobank expects to see volume growth of 4.5%, 3.5% and 3.5% respectively next year. However, not all business operators will benefit from this average growth, since price increases are meagre, competition is intense and serious efforts are needed to keep up with new technological developments.
Paul Dirken, Director of Businesses at Rabobank: ‘All the SME sectors are benefiting from the economic recovery. At the same time, we see that prices are still under pressure. Higher sales will not necessarily lead to higher revenue. Business operators appear to be still quite cautious when it comes to investment. We expect the broad recovery to instil sufficient confidence in business owners so that they will be more prepared to invest during the course of 2016. And that business investment will increase again.’
Competition is increasing in many sectors. Businesses have to do their utmost to differentiate themselves and keep up with ever-changing conditions. ‘Flexibility in your business is a great asset,’ says Dirken. Business operators can improve this for instance by intelligently using software as a service and flexible staff. Dirken: ‘For businessmen who make clear and differentiating choices in terms of their target group, product and service and know how to attract customers, 2016 offers good prospects.’
The construction sector is a good example of a sector with high average growth – 6.1% in 2015 and a further 3.5% in 2016 – from which not all players will benefit. The growth is mainly in the improving housing market, in which contractors who are also developers are seeing their order books increase. Infrastructure and non-residential construction will not participate to the same extent. There are wide regional variations and outside housing, investment is still only moderate.
Business services are benefiting from the increased activity in other sectors. Business service providers such as legal firms, accountants and consultants – but also ICT companies – can help businesses take advantage of changes and thus earn money. But they must also not forget to make their own changes, since they have to cater for changing customer requirements. The organisational model is also important. Dirken says: ‘Strictly hierarchical types of organisation, such as the partner model, are to some extent an obstacle to flexibility.’
The increasing international dynamic is having a positive effect on wholesalers. The wholesalers have to strengthen their chain positions to prevent others dictating their margins. ‘We are seeing consumer goods wholesalers increasingly using their own brands and retail outlets in order to strengthen their chain positions and thereby achieve higher margins,’ explains Dirken.
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