Strong growth in sole proprietorships
According to CBS figures, the number of business establishments in the construction industry rose to a whopping 182,000 early this year. An increase of 8% compared to a year earlier. The largest growth can be attributed to the number of sole proprietorships, which now account for 85% of the sector.
Labour demand exceeds supply and materials shortage
ABN AMRO Bank has revealed that growth in residential and non-residential construction is slowing down. This is mainly due to a shortage in the labour market of construction personnel and materials. This makes sole traders very vulnerable: if orders are delayed, this directly affects cash flow and can mean bankruptcy.
Number of construction bankruptcies traditionally higher
Marc Doodeman quotes in an article for Cobouw: "Construction companies suffer from high construction costs that are not always factored in. Due to the relatively low margins in construction, this has an immediate and firm effect". Sole traders are then the first to go over the top. Even though the first quarter saw a decline in percentage terms, the number bankruptcies increased by a whopping 26.8%.
Expectations
The labour market for construction personnel is expected to show a continued shortage for the time being. Also, demand for construction projects will remain topical. Rabobank says that not enough homes are currently being built to make up for the housing shortage.
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