Dutch business confidence improved to -1.8 in Q1 2026, the best level since early 2022. Still, 94% of businesses are dealing with higher costs, mostly from staff, and half cannot pass these costs to customers. Your sector, pricing power, and cost structure now matter more for strategy than overall confidence. Sectors that rely on knowledge are doing well, while traditional sectors continue to face difficulties.
Main Findings:
- Business confidence improved to -1.8 (from -20.8 in Q4 2022), but sectoral divergence is wide.
- 94% of Dutch businesses show higher costs, with 82% citing personnel costs as the primary driver
- 50% of firms cannot pass cost increases to customers, creating widespread margin compression
- 67.5% of Dutch businesses were profitable in 2025, while 12.4% operated at a loss
- The construction, IT, and automotive sectors show pricing power; hospitality, agriculture, and culture face constraints.
The Centraal Bureau voor Statistiek (CBS) reports business confidence in the Netherlands rose to -1.8 in Q1 2026. That’s the highest reading since early 2022.
While still negative, business confidence has improved.
If you are an expat running a small business in the Netherlands, this number reflects the current market, your pricing ability, and where your business might face ongoing difficulties.
The CBS survey, conducted with EIB, Kamer van Koophandel, MKB-Nederland, and VNO-NCW, provides practical information to guide your business decisions. It is not meant to predict the future or reflect general feelings.
The next sections will present the main findings, identify any gaps, and highlight areas that need more focus.
What Does Business Confidence at -1.8 Actually Mean?
A confidence level of -1.8 means more Dutch businesses are still more pessimistic than optimistic, but the difference is getting smaller.
For comparison, confidence was -20.8 in Q4 2022 and fell to -7.5 in April 2025 before leveling off. This shows a slow recovery, though there have been ups and downs.
Differences between sectors matter more than the overall confidence number.
Nine of twelve sectors improved, but the spread is wide:
- Information and communication: +9.2 (strongly positive)
- Auto trade and repair: 5.8
- Retail: 1.4
- Agriculture/forestry/fishing: -20.6 (severe pessimism)
- Hospitality: -12.0
- Transport and storage: -4.7
Companies in IT services, software, or digital communications are seeing strong market support as these sectors steadily improve.
Hospitality, agriculture, and traditional transport still face ongoing challenges that probably will not go away with only slight economic growth.
In short, your sector matters more than overall confidence trends. When making decisions, consider whether your market is growing or shrinking in the long run.
Key insight: Sectoral divergence is widening. Knowledge-intensive sectors maintain confidence while traditional sectors confront persistent structural pressure. Your sector determines whether market forces work with you or against you.
Why Are 94% of Businesses Reporting Higher Costs?
94% of Dutch businesses say their costs are up, indicating that most sectors are under pressure.
The main reason is higher personnel costs. 82% say labor is one of their top 2 rising expenses.
This is a real issue. Dutch labor costs rose 3.8% year over year as of September 2025. In 2026, employer social security adds 18% to 22% to gross pay. Companies expect salaries to rise by 1.25% to 3.2%, depending on the sector and pay level.
If you are an expat entrepreneur dealing with Dutch labor law, CAO agreements, and rising wages, your main challenge is that staff costs are going up faster than you can raise your prices.
Energy, transport, and housing costs come up less often. In 2026, the labor market is the main concern for businesses.
Unemployment is expected to go up slightly, from 3.9% in 2025 to 4.1% in 2026. This is not because of job cuts, but because the number of jobs is not keeping up with the growing workforce.
So, businesses still face tough competition to hire good people.
Hiring costs are not easing. To attract more talent, businesses need to focus on their reputation, offer good pay packages, and provide flexible work options.
Key insight: Personnel costs dominate business concerns in 2026 because competition for talent remains intense despite modest unemployment increases. Labor market tightness creates a structural cost floor you cannot design around.
How Does Pricing Power Vary Across Sectors?
At this point, cost pressures become a long-term issue.
50% of Dutch businesses report they cannot pass cost increases to customers, or they do so only marginally.
Since 94% of businesses face higher costs and can pass them on to only 46%, many are seeing their profit margins shrink.
This pricing constraint varies dramatically by sector:
Sectors with pricing power:
- Construction: 72.7% can pass costs fully or largely
- Transport/storage: 55%
- Auto trade: 52.4%
- Business services: 51.3%
Sectors with limited pricing power:
- Real estate: 18.6%
- Agriculture: 29.2%
- Retail: 34.8%
- Culture/sports/recreation: 33.5%
In sectors with limited pricing power, businesses need to become more efficient to absorb higher costs, since customers are unlikely to accept price hikes.
Customers are very sensitive to price increases, likely because their budgets are tight due to mortgage payments, inflation, and strong competition.
Your strategy should align with your sector. If you have pricing power, use it carefully and be ready to explain your value. If not, focus on running your business more efficiently and making sure your costs and value are clear.
Key insight: Pricing power is the critical variable that determines whether you absorb cost pressure through margins or efficiency. The construction and transport sectors maintain pricing power due to structural demand. Real estate and retail face customer price resistance.
What Are the Profitability Benchmarks by Sector?
The CBS data shows 67.5% of Dutch businesses were profitable in 2025, while 12.4% operated at a loss.
Sectoral breakdown:
Highest profitability rates:
- Wholesale/trade intermediation: 77%
- Auto trade: 76.6%
- Real estate: 75.8%
Lowest profitability rates:
- Culture/sports/recreation: 49.7%
- Transport/storage: 56.1%
- Hospitality: 57.7%
These benchmarks help you see how your business compares. If you are not profitable after the early years, you are in the bottom quarter of Dutch companies.
If this is your situation, it is time to rethink your strategy. You may need to adjust your business model, pricing, costs, or market focus.
The longer pattern matters too. For 14 consecutive quarters through Q2 2025, more Dutch manufacturers reported declining profitability than improving it. That’s three and a half years of margin compression.
This long period of shrinking profits changes how businesses act. Many cut back on innovation and delay digital projects because staying afloat becomes the main goal.
For small businesses, this is tough. With low margins and little pricing power, it is hard to invest and break out of these continuing difficulties.
Key insight: Wholesale, auto trade, and real estate show the highest profitability rates (above 75%). Culture, transport, and hospitality struggle below 60%. Prolonged margin compression forces businesses into survival mode rather than investment mode.
How Has the Labor Market Shifted in 2026?
This change means you need a new approach to finding and keeping talent.
For the first time since 2021, there are more unemployed people (409,000) than job openings (387,000) in the Netherlands as of late 2025.
This is the opposite of 2018 to 2022, when it was hard to find talent and many companies hired internationally. Now, the job market for expats is tougher.
Entrepreneurs should consider the following implications:
- Reliance on international recruitment needs reconsideration.
- Local talent pools may be more accessible than in recent years.
- Salary expectations may moderate slightly, though structural wage pressure remains.
At the same time, employers are increasingly focusing on skills rather than education levels.
Skills-based hiring enables faster vacancy filling and offers expat entrepreneurs opportunities to differentiate themselves and their teams through demonstrable competencies such as problem-solving, technical knowledge, and managerial insight.
Degrees and certificates matter less now, while proven skills are valued more.
Key insight: The labor market has shifted from a state of talent scarcity to a modest surplus. However, structural wage pressure persists. Skills-based hiring creates new differentiation opportunities for entrepreneurs who focus on demonstrable competencies over formal credentials.
Why Does Construction Have Strong Pricing Power?
Construction stands out, with 72.7% of businesses able to pass costs fully or largely to customers.
This is not by chance. The Dutch government’s goals for building more homes and investing in climate projects keep demand high, as housing shortages and infrastructure needs persist.
Businesses involved in construction, renovation, or building services benefit from legitimate pricing power.
Businesses that support construction, like material suppliers, specialized trades, project managers, or compliance services, are also in sectors where strong demand makes it easier to pass on higher costs.
This means that sectors with reliable demand can keep their profit margins even when costs rise. You should check whether your business benefits from similar trends.
Key insight: Construction maintains pricing power because government housing targets and climate investments create structural demand. Adjacent sectors benefit from this tailwind. This demonstrates how policy-driven demand creates legitimate pricing power.
What Strategic Assessments Should You Make Now?
The CBS data highlights three key assessments for consideration.
First, look at your sector’s position.
Determine whether your sector is structurally improving (such as IT, business services, or auto) or undergoing challenges (such as hospitality, agriculture, or culture). This assessment will indicate whether market forces are likely to support or hinder your business over the next 24 to 36 months.
Second, check your pricing power.
Assess whether cost increases can be legitimately passed on to customers or whether competition must focus on efficiency. This will determine the trajectory of the margin and whether to invest in operational optimization or value communication.
Third, review your cost structure.
With 82% of businesses citing personnel costs as the primary pressure, evaluate labor intensity, talent acquisition efficiency, and the effectiveness of controls to prevent cost drift.
These three factors, your sector, pricing power, and cost structure, matter more for your strategy than general confidence trends.
Key insight: Your strategic options depend on three variables: whether your sector has structural tailwinds, whether you have legitimate pricing power, and whether your cost structure (especially labor intensity) creates vulnerability. These fundamentals matter more than sentiment trends.
Is Now the Right Time to Expand?
Confidence at -1.8 suggests the cycle may be entering a more favorable phase because conditions are improving but not yet robustly positive.
If you are thinking about expanding, hiring, or investing, focus on testing your ideas, checking your assumptions, and keeping financial reserves.
The current mood is slightly negative but getting better, so a careful approach to expansion makes sense:
- Test new markets before full commitment.
- Validate pricing assumptions with real customer behavior.
- Retain financial buffers for volatility.
- Invest in controls that provide early warning of margin erosion.
Right now, it is neither a crisis nor the time for aggressive growth.
The data suggests you should take careful risks and set up ways to get quick feedback.
Key insight: Slightly negative but improving sentiment supports cautious expansion with validation checkpoints. Test before committing. Validate pricing assumptions with real customer behavior. Retain financial buffers for volatility.
What Controls Protect You in This Environment?
When 94% of businesses face cost increases, and 50% cannot pass them through, those with structural discipline are more likely to succeed.
That means:
- Cost visibility: You know where money goes before it becomes a problem
- Pricing discipline: You test pricing power rather than assume it
- Margin monitoring: You catch erosion early, not after quarters of drift
- Talent efficiency: You optimize for productivity, not just headcount
The CBS data does not tell the future. It only shows where the current pressures are.
It is important to put controls in place that help you handle these pressures without hurting your business model.
Having a clear organizational structure helps you stay in control during tough market conditions. It is not just extra bureaucracy.
Key insight: When 94% face cost increases and 50% cannot pass them through, structural discipline separates survivors from casualties. Cost visibility, pricing discipline, margin monitoring, and talent efficiency are control points that put pressure on your business without breaking your business model.
Frequently Asked Questions
What does business confidence at -1.8 mean for my business?
A confidence level of -1.8 indicates that more businesses are pessimistic than optimistic, but the gap is narrowing. This suggests conditions are improving gradually but not yet robustly positive. For your business, this means cautious expansion makes sense: test new markets before committing fully, validate pricing assumptions, and maintain financial buffers.
Why are personnel costs increasing so dramatically in the Netherlands?
Personnel costs are rising because Dutch labor costs increased 3.8% year over year (September 2025), employer social security contributions add 18% to 22% to gross salaries, and unemployment remains low (projected 4.1% in 2026). Competition for talent remains intense despite modest increases in unemployment, keeping wage pressure high.
How do I know if I have pricing power in my sector?
Test your pricing power by attempting selective price increases and measuring customer response. Construction (72.7% of pass-through costs), transport (55%), and auto trade (52.4%) show strong pricing power. Real estate (18.6%), agriculture (29.2%), and retail (34.8%) face severe constraints. If customers consistently resist price increases, you lack pricing power and must compete on efficiency.
What profitability rate should I expect for my sector?
Wholesale and trade intermediation shows 77% profitability, auto trade shows 76.6%, and real estate shows 75.8%. Culture, sports, and recreation struggle at 49.7%, transport at 56.1%, and hospitality at 57.7%. If your business is not profitable after the initial startup period, you’re in the lower quartile and need strategic analysis.
Should I expand my business in 2026?
Expansion makes sense if you operate in a structurally improving sector (IT, business services, construction, auto) and have validated pricing power. Use a careful approach: test new markets before full commitment, validate pricing with real customers, retain financial buffers, and install controls that provide early warning of margin erosion.
How has the labor market changed for expat entrepreneurs?
For the first time since 2021, there are more unemployed people (409,000) than job openings (387,000). This reverses the talent scarcity that occurred from 2018 to 2022. However, structural wage pressure persists. Employers now focus on skills rather than education level, creating differentiation opportunities for entrepreneurs who prioritize demonstrable competencies.
What controls should I install to manage cost pressure?
Set up four critical controls: cost visibility (know where money goes before it becomes a problem), pricing discipline (test pricing power rather than assume it), margin monitoring (catch erosion early, not after quarters of drift), and talent efficiency (optimize for productivity, not just headcount). These controls take pressure without breaking your business model.
Why does construction have such strong pricing power compared to other sectors?
Construction maintains pricing power (72.7% of pass-through costs) because Dutch government housing construction targets and climate adaptation investments create sustained structural demand. Housing shortages persist, and infrastructure needs remain. This policy-driven demand supports cost pass-through that other sectors lack.
Key Takeaways
- Sectoral divergence matters more than headline confidence. IT and communication (+9.2), auto trade (+5.8), and retail (+1.4) show positive sentiment. Agriculture (-20.6), hospitality (-12.0), and transport (-4.7) face structural headwinds. Your sector positioning determines whether market forces work with you or against you.
- Cost pressure is universal, but pricing power is not. 94% of businesses face higher costs (82% cite personnel costs), but only 50% pass costs to customers. Construction (72.7%), transport (55%), and auto trade (52.4%) have pricing power. Real estate (18.6%), agriculture (29.2%), and retail (34.8%) face severe constraints.
- Profitability benchmarks disclose strategic health. 67.5% of Dutch businesses were profitable in 2025. Wholesale (77%), auto trade (76.6%), and real estate (75.8%) lead. Culture (49.7%), transport (56.1%), and hospitality (57.7%) struggle. If you’re unprofitable after startup periods, you need strategic analysis.
- Employment market dynamics have shifted, but wage pressure persists. More unemployed people (409,000) than job openings (387,000) for the first time since 2021. However, competition for talent remains intense. Skills-based hiring creates new differentiation opportunities over traditional credentials.
- Cautious expansion with validation checkpoints makes sense now. A confidence reading of -1.8 suggests improving conditions but not strong growth. Test new markets before full commitment. Validate pricing assumptions with real customer behavior. Keep financial buffers for volatility.
- Structural discipline separates survivors from casualties. Implement four controls: cost visibility, pricing discipline, margin monitoring, and talent efficiency. These controls take pressure off your business model without breaking it, even as 94% face cost increases and 50% cannot pass them through.
- Policy-driven demand creates legitimate pricing power. Construction maintains margins because government housing targets and climate investments create sustained demand. Evaluate whether your positioning benefits from similar structural tailwinds rather than temporary mood changes.
