Staff shortages problem in all sectors

Despite healthy growth in all sectors over the next two years, ABN AMRO expects them to grow at a lower rate than in 2018. This is reflected in ABN AMRO's latest Sector Forecasts 2019 and 2020. The agricultural sector (+2 percent) is doing even better than expected in 2019, as are industry (+3.5 percent) and retail (+2 percent). After agricultural output fell due to the very dry summer, the outlook for next year is more positive. ABN AMRO expects production to increase again, especially in the vegetable sectors. Despite all the uncertainties, manufacturing will also grow in 2019, although it will weaken by 2.5 percent in 2020. Retailers operate in a complex market. Although consumers are expected to have less purchasing power and to be more critical, the retail sector is showing volume growth of 2 percent in both 2019 and 2020.

Staff shortage hampers growth in various sectors

Especially companies in the transport sector and business services see the growing shortage of personnel as a barrier against growth. For example, since the third quarter of 2018, the transport sector has been suffering from a real labour shortage, particularly in road transport, warehousing and logistics service providers. In business services, the shortage of highly skilled personnel is also an obstacle against growth as it becomes increasingly difficult to fill vacancies. For example, temporary employment agencies can no longer cope with the high demand for labour and, for the first time in years, a reduction in growth is visible. Staff shortages are also taking their toll in the construction and catering sectors. In the construction industry, for example, orders are rejected because there are not enough professionals and some restaurants are closing their doors because of a structural shortage of personnel.

Unconventional measures inevitable to solve staff shortages

ABN AMRO expects growth in many sectors to slow down due to chronic staff shortages. At the same time, the demand for workers with specific, often technological knowledge is growing strongly. "Staff shortages are now really starting to hurt and we don't expect any change in the short term. Companies are therefore forced to take drastic measures. A possible solution is to invest extra in education and training, but that alone is not enough," emphasises Franka Rolvink Couzy, Head of Sector Research at ABN AMRO. "The challenge for entrepreneurs lies in finding new ways to retain staff. This can be done, for example, by offering flexible working hours, or by giving extra pay if people are willing to work more hours. It is also very important that companies focus on automation and robotisation in order to overcome the structural shortage of labour.

Source: ABN AMRO