Dutch businesses are saving more, while investing less

Companies in the Netherlands are increasingly saving money, Statistics Netherlands has reported. While the income of businesses outside of the financial sector rose to record heights last year, the investments lagged.

The statistics agency looked at companies’ profits, the balance of taxes and subsidies, and expenditures on dividends. This corporate income totaled €162.5 billion last year, €14.5 billion more than the year before.

Compared to 2020, this is a rise of almost 50 billion euros. Especially, the profits increased significantly last year. The growth was somewhat tempered by companies paying out more in dividends in 2024 than the year before.

All this extra money did not lead to a proportional increase in investment, for example, in commercial buildings, company cars, and machinery. These investments increased by less than four billion euros. As a result, companies still had more than 10 billion euros left over to strengthen their financial position, for example by saving or paying off debt.

Head economist for Statistics Netherlands, Peter Hein van Mulligan, had no explanation as to why the investments were lagging. “We just register it,” he said. “It’s possible that companies also spent more on, for example, share buybacks, but that’s not something we can see in these figures.” In any case, that alone couldn’t explain the entire gap, the economist added.

This suggests that the corporate sector as a whole could likely invest quite a bit more. “These figures are for 2024. But there’s no indication that the picture will suddenly look very different in 2025,” Van Mulligen added. “The current level of geopolitical uncertainty certainly doesn’t help.”