Building sector recovery next year at earliest

The Dutch building sector will not recover from the recession until 2011 and production will shrink 7.8% this year, according to a new report by ING bank economists, quoted by news agency ANP.

In particular office and commercial property development is under pressure from overcapacity in the market. And spending on infrastructure is also down because of government cutbacks. Some 14% of Dutch offices are currently empty, the ING economists say.
The housing sector will shrink by 11% this year due to uncertainty about mortgage tax relief and continuing unease on the financial markets.
The hard winter was another blow for hard-pressed building firms, the report says. ‘On some construction sites work was halted for two months, yet fixed costs such as wages continued,’ the report said. Some 348 building firms went bankrupt in the first three months of the year.