The hidden weaknesses behind Dutch economic growth

Dutch growth has been resilient but is masking increasingly binding constraints on the country’s longer-term growth potential.

• From Q1 2020 to Q1 2026, the Netherlands outperformed most large euro-area economies despite the pandemic, energy crisis, trade tensions and wars.
• Machinery manufacturing, including the ASML cluster, contributed 14% of growth over the past six years, while ICT and pharmaceuticals contributed 19% and 8%, respectively.
• Government consumption and the expanding semi-public sector also supported growth, whereas public investment played a much smaller role in strengthening future capacity.
• Labour shortages remain severe: 45% of vacancies are difficult to fill, and almost two-thirds of employers with hard-to-fill vacancies report that candidates lack the required skills.
• ING estimates that the semi-public sector will account for almost 80% of expected employment growth in 2027–30, while nitrogen rules, grid congestion, permitting delays and infrastructure pressures constrain investment.

Takeaway: Investors should not extrapolate the Netherlands’ recent resilience without considering labour, infrastructure and investment bottlenecks that could limit future growth despite a strong high-tech base.