Dutch service sector returns to growth

Dutch service sector returns to growth

The Dutch service sector grew in the second quarter for the first time since 2012, according to recent figures released by Statistics Netherlands.

Turnover generated by providers of business services in the second quarter of 2013 was 0.3 percent above the level of the same period last year. This marginal improvement follows two quarters of negative turnover results. The number of bankruptcies in the sector business services rose to a record level in the second quarter.

Within the sector business services, achievements vary considerably. The travel industry and management consultancy agencies contributed to turnover growth in the sector. Architectural firms faced the most substantial loss of turnover.

Travel industry performs well
With a 12.5 percent turnover growth, travel agencies and organisations achieved the best results in the second quarter of 2013. Due to online travel agencies in particular, the entire travel industry managed to weather the economic crisis. Only in the early stages of the economic crises in 2009, turnover fell marginally. Subsequently, an upward trend became apparent which has continued into the first half of 2013.

Higher turnover management consultancy agencies
After two meagre quarters, turnover realised by management consultancy agencies grew by 2.7 percent in the second quarter of 2013. In the early years of the crisis, many companies cut back on costs and management consultancy agencies have suffered the consequences of the austerity policy and have shown poor turnover results since record year 2008. Since 2012, turnover developments have been positive apart from a small dip in the fourth quarter of 2012. With a share of more than 10 percent, management consultancy agencies are an important player within the sector business services.

Self-employed and one-man businesses accounted for a significant part of turnover growth in this segment. Since the onset of the crisis, their number has increased by nearly 70 percent to approximately 75 thousand on 1 January 2013.

Turnover loss architectural firms less dramatic
Turnover generated by architectural firms slumped by 14 percent in the second quarter relative to one year previously. The decline is obviously smaller the in the two preceding quarters. The slump in turnover generated by architectural firms, which started in the second quarter, is emblematic of the severe crisis which currently hits the construction sector. The number of building permits granted in the Netherlands reached a historic low early this year and the value of new architectural orders declines further. Prices of architectural services have not risen since the fourth quarter of 2008. Turnover has been reduced almost by half compared to the pre-recession period.

Bankruptcy record
The number of bankruptcies in the sector business services increased further in the second quarter to 460, a record since monitoring of the sector started in 1993. Over the entire year 2012, a total of 1,383 providers of business services went bankrupt.

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