Dutch construction sector has avoided major bankruptcy wave plaguing other countries

Bankruptcies in the construction industry have surged across the eurozone this year, but the Netherlands has managed to keep its figures relatively low, according to new findings from Allianz Trade published this week. Between January and August, Italy and Sweden experienced a staggering 35 percent rise in construction bankruptcies.

In stark contrast, the Netherlands reported only a 4 percent increase in bankruptcies within the construction sector. France has also had a rough time with construction-related bankruptcies, seeing a 31 percent increase, with Germany reporting a 20 percent increase.

Many construction firms are grappling with financial challenges, including high levels of debt, delayed payments, and project delays. Larger companies, in particular, have shown greater vulnerability to these issues.

Looking ahead, Allianz Trade anticipates a "cautious recovery" for the construction industry by 2025. Researchers suggest that "the crisis in construction appears to have hit rock bottom." While recent interest rate cuts in Europe should provide some relief, they caution that it may take around six months for the sector to see tangible benefits.

New home builders are often delayed by waiting for permits, difficulties in connecting to the electrical grid, and persistent objections from opposing parties regarding new projects. Allianz warned, "These delays can be detrimental to companies, as revenue decreases while fixed expenses continue. On top of that, they face rising wage costs."

Extreme weather conditions have also become a growing concern for construction firms. "Constructing during heavy rains poses challenges, just as it does during extreme heat," Allianz noted.