Fantastic projects in turbulent market

Due to expensive raw materials, construction is in danger of falling into a vicious cycle of price increases. Rising costs are reducing the number of bids for tenders, further driving up the price for both homes and offices. In the process, pressure is mounting on politicians to do something about these explosive price increases. But for the time being, the current caretaker government mainly paints a picture of being busy with itself.

On a positive note, the Dutch economy is already almost back to its pre-corona crisis level. Last quarter, the economy grew by 3.1%. When the growth is compared to last year's figures, it even shows an increase of 9.7% (the largest year-on-year growth ever), still only 0.4% smaller than the size of the economy before corona in 2019. According to CPB's August estimates, GDP will increase 4% in 2021, followed by 3% growth in 2022. All good news you might say, but potential threats are also seen that could hinder rapid growth.

One area of concern is the global scramble for the availability of raw materials which is driving up their prices and thus increasing costs for the declining industry much more than anticipated earlier this year. For example, the price of Oil in July was 74% higher than in the same period a year ago. The price of Aluminum was 49% higher. Aluminum is thus expensive and is expected to remain so in the coming years. Because aluminum is not only a widely used material in facade construction but also a highly sought after material for energy transition.

Another concern is that the jobless rate continues to fall. The unemployment rate stood at 3.1% in July, making the unfilled vacancy rate not only higher than before the crisis, but there are more vacancies than unemployed. Companies in the construction and facade construction industry are pulling out all the stops to increase production, but often can barely keep up with the increase in demand due to shortages of materials and/or personnel. 

Licensing for new home construction is growing steadily. In the second quarter of 2021, nearly 19,000 homes were licensed for construction, 25% more than last year. Nonresidential construction also saw 14% more permits issued in the past 12 months. Partly for this reason, CBS and Bouwkennis have revised upwards the growth figures for Nonresidential construction for the next two years by 15% and the outlook is certainly more positive for Nonresidential construction than predicted by the EIB at the beginning of this year. As a result of these developments, order books for both residential and non-residential construction increased to 12.5 and 10.1 months, respectively. 

All in all, this means construction is holding up well during the corona crisis. Especially when we realize that construction sales in the second quarter of 2021 were 9.3% higher compared to a year earlier. However, uncertainties remain regarding the aforementioned availability of materials, raw material price increases and concerns about labor market tightness. But nevertheless, we see that the Facade Industry is and remains capable of realizing fantastic projects as was once again evident on September 16 at the award ceremony of The Best Building of 2021 by the Branchevereniging Nederlandse Architectenbureaus (BNA). 

Cooperation between designers, architects and the facade industry is therefore indispensable and necessary. Due to the rapid development of facade technology and architecture, intensive cooperation is simply necessary to achieve top performance. Facades are also, of course, a fantastic opportunity for buildings to express the creativity of the architect. After all, buildings derive their aesthetic value and character largely from the appearance of the facade. Both professions BNA and VMRG contribute to this simultaneously. Cooperation with facade builders with the VMRG Quality Mark offers architects the assurance of quality and results in fantastic projects even in a turbulent market.