Netherlands

2016 business cost index

87.7

Country ranking

3rd / 10

Netherlands, GDP per capita: US$52,172 (2014), GDP growth rate: 1.2% (2015), Unemployment rate: 6.7% (Q4/2015), Inflation rate: 0.5% (2015)
Locations12016 indexRank12014 indexRank1
Netherlands87.7394.53
Amsterdam87.822n/a
Rotterdam87.521n/a
1  Overall results for the country and cities. Rank for Netherlands is relative to 10 countries in both 2016 and 2014. Ranks for cities are relative to 111 cities in 2016 and 107 cities in 2014.
 
Sectors2016 indexRank22014 indexRank2
Digital services82.3392.34
R&D services74.0383.72
Corporate services77.8389.44
Manufacturing91.6396.93
2  Rank is relative to 10 countries in both 2016 and 2014.
 
Cost factors3
  • 19.8% currency depreciation against the US$
  • Labor cost increase in-line with average for all study countries
  • Higher facility costs in 2016 study due to change in cities examined (major cities instead of regional cities)
  • Changes in tax incentives applicable to R&D expenditures
3  Significant cost trends between 2014 and 2016.
 
Exchange rate sensitivity4IndexChangeRank5
20% appreciationUS$1 = €0.7394.4-6.73
20% depreciationUS$1 = €1.0983.2+4.53
4  "What if" sensitivity scenarios based on appreciation or depreciation relative to the US dollar.
5  Rank among 10 countries assuming equal appreciation/depreciation of all currencies relative to the US dollar.

Locations

National results for the Netherlands reflect the combined results for two major cities: Amsterdam and Rotterdam. Total business costs in these two cities are relatively similar, with just 0.3 percentage points separating them. The Netherlands is the only country where the study cities have changed since the previous edition of Competitive Alternatives. However, national results for the Netherlands continue to be compared to its results in the 2014 study because the country’s compact geography means that business costs are relatively homogeneous in both major and regional cities throughout the country, with only facility costs showing notable variations between larger and smaller cities.
 

Sectors

Among the four study sectors, the Netherlands consistently ranks third among the 10 countries across all sectors. Significant incentive support for R&D activities in the Netherlands helps to position R&D services as the sector in which the country holds its greatest cost advantage, with total costs 26.0 percent below the US baseline.
 

Cost factors

The rise in value of the US dollar relative to the euro in 2015 is the primary driver of the Netherlands’ improved cost index in 2016. However, other cost trends as noted in the table also contribute to the Netherlands’ overall results in the current study.
 

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