Aftermath of Iran war still a threat to large part of Dutch economy

ABN Amro warns in its latest sector outlook that several parts of the economy remain under pressure, even as the conflict in the Middle East seems to be easing. Industries such as manufacturing, transport, construction, leisure, and retail are likely to face continued headwinds in the near term, driven by elevated energy prices, subdued consumer spending, and rising interest rates.

Manufacturing is being squeezed by higher energy costs and increasing input prices. Transport companies are struggling with elevated diesel prices, while the construction sector is dealing with more expensive materials and bottlenecks in the electricity grid, which are delaying or halting projects.

ABN Amro’s outlook suggests that continued price increases will further erode purchasing power. The bank expects food prices to peak in the first half of next year, leaving consumers with less disposable income for other purchases. That is likely to weigh on the leisure sector, as households reduce spending on things like days out, and could also put extra strain on retail businesses.

ABN Amro expects that persistent inflation alongside a tight labour market will push wages higher from 2027. The increase is likely to be strongest in sectors with acute labour shortages, including construction, technical trades, and healthcare, where employers may face significantly higher personnel costs, the researchers say.