The Dutch economy is likely to grow by 0.4 percent this year. This growth varies by sector and is expected to be highest in healthcare and information and communication, with ICT in particular as a strong growth sector within these. Raboresearch, which conducted the survey, on the other hand, expects contraction in agriculture, transport and storage, industry, and especially construction. So, it is mainly the manufacturing sectors with a negative outlook.
The sectoral growth differences are reflected in the expectations for the 40 Dutch regions because the economic structure differs between areas. Regions with high importance of sectors growing this year may benefit. While areas where sectors that are shrinking are relatively large may suffer. “And because the size of manufacturing, ICT and specialized business services varies widely between regions, we expect larger than usual regional growth differences for 2024,” the report said.
Greater Amsterdam continues to grow, Brainport uncertain
At almost 2 percent, Greater Amsterdam is the region with the highest expected growth in 2024. The region has a service economy par excellence, with many ICT and specialized business services. Think of the many law firms, consulting firms, and notaries. The regional economy benefits from high growth in these sectors. In addition to Greater Amsterdam, this also applies to Utrecht. The manufacturing sectors (agriculture, industry, and construction) are relatively small here, so the negative impact of the expected contraction in those sectors is small in both regions.
Still, Greater Amsterdam has to rely even more on its exceptional circumstances. Factors such as the many knowledge and educational institutions, the large and well-educated workforce, the extensive range of amenities, and the international allure ensure that since 2009, the region has grown faster than we would expect based on its economic structure, by an average of 1.2 percentage points per year. We include this in our expectations for this year.
Larger expected growth differentials in 2024
Brainport Eindhoven is the only region that could keep up with the high growth of Greater Amsterdam over the past 15 years. Brainport also owes that high growth primarily to specific regional conditions, in short, the high growth of ASML and its impact on the rest of the regional economy. Therefore, in our regional forecasts of the past few years, these two regions tended to lead together.
For this year, Laboresearch expects relatively high growth in Southeast Brabant, too. The region is bothered by the expected contraction of industry, but over the past 15 years, Brainport managed to outpace its growth forecast based on economic structure most of the time. The high growth of ASML and the chip machine manufacturer’s suppliers have been a big part of that. But the fact that ASML, in particular, expects 2024 to be a transitional year with no sales growth makes the forecast uncertain. With the approval of the expansion plans, however, the company, along with Brainport Eindhoven, will have room for further growth.
Expected contraction in half of the Netherlands
Shrinkage is expected for 19 of the 40 regions in 2024. Many of these regions are affected by the industry’s production decline, especially South Limburg, the Achterhoek, Zeeuws-Vlaanderen, Delfzijl and surroundings, Southwest Friesland, and IJmond. To a lesser extent, the contraction in construction is also affecting these regions. On the contrary, they house fewer service providers, so they also benefit less from the growing ICT and business services market.
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