Recent reports from the credit insurance company Atradius have shown signs of a slowdown in Dutch construction and manufacturing. The report on manufacturing revealed that, despite robust growth and high demand in 2018 and H1 of 2019, recent downsides are being felt in the Dutch metal and steel sector.
Photo: *rboed* / Creative Commons Licence: CC BY
Together with a reduced automotive demand, part of the slowdown is being attributed to pressure from the EU for the construction and agricultural sectors to reduce nitrogen emissions, which has led to some construction and infrastructure projects being put on hold.
The Dutch construction industry slowdown has also been highlighted in a second report from Atradius. Similar to manufacturing, there was healthy growth in construction in 2018, which began losing steam in 2019 due in part to fixed price agreements and a shortage of skilled labour.
The report found that increased financial pressures are multiplying for both Dutch construction and manufacturing companies. It found that the average length for manufacturing companies to receive payment was 45 days. However, it was found to be even more troublesome for the construction industry, with an average payment duration of 60 to 90 days, increasing stress on already-thinning profits and reduced capital.
Last November, thousands of Dutch construction workers converged to protest environmental restrictions they say are crippling their industry. A park in The Hague filled up with trucks, diggers, cranes and construction workers in orange high-visibility jackets. The demonstration disrupted traffic around the city for hours, forcing police to block the main highway into the city to prevent even more trucks from arriving.
The protests were against government limits on nitrogen emissions and rules about transporting sand and earth contaminated with tiny amounts of chemicals known as PFAS , which are used in firefighting foam, nonstick pots and pans, water-repellent clothing and many other household items.
Fintech companies like Factris are proving to be invaluable for many construction and manufacturing businesses in need of relief from lengthy payment periods. This financial relief is provided via a financing method called “factoring”, where the unpaid invoice is sold to Factris for a fee. Factris then provides the company with the capital they need—often on the same day—instead of having to wait 45 to 90 days for payment.
Factris CEO Brian Reaves said: “Businesses who have to wait long periods for payment are benefiting a great deal from factoring. It’s the most simple, direct solution for an invoice that isn’t being paid.”
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