Construction production increased in 2019, but will come to a halt in 2020 and 2021 as a result of the nitrogen problem. The new construction of houses and infrastructure projects in particular are being hit hard. That is the conclusion of the Economic Institute for Construction (EIB) in the study published Wednesday Expectations construction production and employment 2020.
There was substantial construction last year, according to the institute: total production in the non-residential building sector increased by more than 7 percent, driven by the new building. Work capacity in the sector was also expanded for the third year in a row.
The near future of the construction sector is less bright: it will come to a halt in the coming two years. In the first months of 2019, fewer permits were issued for the construction of new homes, and this was reinforced in the second half of the year due to the nitrogen crisis. The new-build production of homes will decrease in both years by around 5 percent per year.
In the period 2022-2024, the EIB expects that building production will start to develop strongly again, and new-build production of homes can grow by an average of 7 percent in these years to 70,000 homes by the end of the period. This will not lead to a real expansion of the housing market: the CBS expects that the number of households looking for a home is still well above that every year.
After years of high employment growth, the picture on the construction labor market is also changing this year, according to EIB. Employment is expected to fall gradually over the course of the year and will on average be just above 2020 in 2020. In 2021, employment will fall by 1.5 percent. The inflow from the training programs is sufficient in the coming two years to meet the demand and there will be no high unemployment.
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