PerchPulse - The Netherlands Market Update August 2022 

The latest and most relevant info on talent, immigration, business, and cost of living in the Netherlands, to help HR people stay close to events and support their people strategy.

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A big feathery welcome!

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Hey there! Welcome to PerchPeek's August 2022 Netherlands Market Update! PerchPeek’s relocation specialists are here to offer insight into top mobility challenges and industry trends. We’re always keeping up with the latest international market trends that matter most to HR leaders, their teams, and their employees, helping them move and support their employees globally. Each month, we curate a monthly newsletter that includes our research and insights to better assist as many HR professionals as possible. We hope you enjoy reading!

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Fly-by Summary:

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• Due to the latest round of COVID-19 disruptions, the Netherlands has seen more and more job vacancies and staff shortages across industries.

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• The cost of living has increased drastically due to inflation in the Dutch economy as a result of the Russian invasion of Ukraine.

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• A 12% increase in rental prices is due to a rise in mortgage rates, increased demand, and inflation.

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• There are currently no recession fears in the Dutch economy amidst the tension in Ukraine and worldwide inflation due to the "tight" labour market, government’s fiscal policy, and significant consumer spending. 

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Talent & Migration: An Opportunity for Skilled Workers

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The biggest challenge faced by the Dutch economy is the resurgence of COVID-19 cases. Going by the data provided, the Dutch jobless rate is the highest it’s been in four months, with a 0.1% increase month over month. The disruption caused by the pandemic is felt by companies and HR teams as there are staff shortages and the labour participation rate remains unchanged.  

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The labour market in the Netherlands is 'tight’, meaning the labour supply is short while the demand is high. About 88 out of 92 occupational groups had significant staff shortages; this is very high compared to 2021. Staff shortages have reached a peak in the Dutch economy's history, and employers and employees are affected. Provinces most affected include the Middle-Utrecht, Zuidoost-Brabant, and Food Valley regions.

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In other news, the Eurostat productivity index is high at 104.83, and at a slight increase versus the forecast. This index shows a high rate of employment and retainment of talents in the Netherlands. 

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Housing & Cost of Living: Significant Price Hikes

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The first six months of 2022 saw an exponential rise in the price of properties. In megacities, there has been a massive 6.7% increase in rental prices, consisting of basic rent and service charges for utilities– the highest it’s been in ten years. 

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Average rent prices vary from one city to the next. The highest cost of living in the  Netherlands is in the busy capital of Amsterdam. Other areas include Rotterdam, The Hague, and Utrecht. 

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Table showing average rent price of various locations in the Netherlands

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Three main factors have caused the rise in housing costs: 

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1. Enormous demand and supply imbalances are the primary causes for the rise in the prices of rental properties.

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2. Rising interest rates caused by government measures to curtail rising inflation.

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3. Government policies to block investors and give aid to first-time buyers also cause an increase in rental prices. 

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Consumer confidence in the housing sector in the Netherlands has reduced significantly, whilst the inflation metric in the Dutch economy is the highest it’s been in 47 years. Potential buyers are reluctant to take mortgages as interest rates have steadily increased in the past six months.. 

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The overall cost of living has increased due to inflation surging to 9.4%; the result of energy costs of the war in Ukraine.

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Business & Economy: A Ray of Hope

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Despite the war in Ukraine and rising inflation, the Dutch economy is expected to grow steadily in 2022 with a 2.9% growth rate. A recession has been skirted due to consumer spending, as well as a tight labour market, government policies, and savings.

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While consumer confidence had dropped to an all-time low, producer confidence was above average in June and July, which is the same for countries worldwide. Non-essential industries (such as car manufacturers) have been hit the hardest as inflation eat up household incomes, whilst the Netherlands’ tight labour market is expected to keep unemployment low. In addition, expansionary fiscal policy from the Dutch government is expected to prevent a full-blown recession in the Netherlands. 

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Conclusion

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The Dutch economy is resilient in the face of a myriad of challenges, including COVID-19 disruptions, the Russian war with Ukraine, and inflation.

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However, the next four months will be tough for workers as they must cope with the rising costs of livelihood and rent. Therefore, any support on the part of employers will be massively appreciated by employees, such as food, energy, and accommodation packages where necessary. 

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Thanks for reading. See you next month!

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