The department annually contributes to the Economic Outlook of the Amsterdam Metropolitan Region. This publication is intensively used as an evidence base for developing policies in the region. Presentations for diverse audiences of mayors and alderman, entrepreneurs, and local and regional policy makers contribute to a lively debate about the future of the region.
The main conclusions for this year’s edition are that the economy of the Amsterdam Metropolitan Area (AMA) has recovered strongly from the Great Recession that started nearly 10 years ago. The economy of the AMA is expected to grow by 2.5 percent this year. This is higher than the growth of the Netherlands, and compares favorably with competing European metropolitan areas. Unemployment fell sharply in 2016 to 6.5 percent and is expected to fall further to 5.9 percent in 2017.
The economic structure of the AMA has changed since the banking crisis. The financial sector is no longer one of the main engines of growth. The AMA is now specializing in wholesale, specialized business services (such as legal services) and other business services (including employment and travel agencies). The AMA is particularly popular with start-ups, especially those with the business services sector. The changing sectoral structure shows that the AMA is resilient and agile: the recession was partly offset by new economic activities.
The growth is largely due to domestic consumption and enhanced investments. The dependence of economic growth on exports is reduced, although the AMA is not immune to external uncertainties. For instance, world trade is under pressure due to rising protectionism. There are also concerns about the eurozone, for example, about the financial stability of the southern Member States. The growth is also under pressure due to the rising house prices which restricts accessibility of Amsterdam for many low and middle income households that are struggling to find housing in the densely populated cities of the AMA.
Special attention in this year’s edition was given to the income distribution between labour and capital. This distribution has given rise to huge debate in response to, for example, suggestions by the Dutch Central Bank and the CPB Netherlands Bureau for Economic Policy Analysis that wage increases have been too limited. This year’s edition of the EVMRA reveals that also in the AMA, the labour income share has declined substantially over the past few years. This suggests reduced bargaining power of workers and self-employed and puts pressure on social relationships. For the region and the country as a whole, finding a new balance is one of the important challenges for the years ahead. More information (in Dutch)
Henri de Groot
Maureen Lankhuizen
August 2017