Dutch construction sector heading for record year of equipment auctions in 2024

• Expected 75% Increase in Auctions Due to Business Closures This Year

• Negative Investment Climate and Competition Are the Biggest Culprits

• 33% of Buyers of Dutch Construction Equipment Come from Abroad

The number of auctions in the Dutch construction sector has drastically increased. This is evident from figures provided by Troostwijk Auctions, which show that more construction companies are selling their machinery and goods due to business closures this year. Factors such as rising construction costs and stringent building regulations are leading to a lack of prospects, prompting many Dutch entrepreneurs to cease operations.

Turning point in the construction sector
In 2023, 90 Dutch construction companies auctioned their business assets due to business closure through Troostwijk Auctions' platform. Most auctions were conducted by entrepreneurs who voluntarily decided to cease operations. Thirty companies did so last year due to bankruptcy. By mid-2024, the count already stands at 95 construction organizations, equaling the record year of 2023. The number of companies auctioning due to bankruptcies has increased significantly compared to 2023 (+30%). The total growth of construction entrepreneurs auctioning due to both voluntary and involuntary business closures in 2024 is estimated to reach 158 this year, a substantial increase of 75 percent compared to 2023.

“It is increasingly difficult for SMEs to keep their heads above water due to competition with large companies within this sector. This is partly due to the decrease in building permits caused by the nitrogen issue,” says Floris Bakels, Account Manager for Wood and Construction at Troostwijk. “In construction, you now have to choose: expand to handle large projects or focus on smaller assignments. Medium-sized construction companies are struggling to stay afloat. As a result, the number of construction entrepreneurs stopping is increasing.”

More construction entrepreneurs adjusting machinery per project
The negative investment climate is also a challenge for construction companies. The CBS foresees an investment shrinkage of one-third compared to 2023. Bakels: “Due to the high interest rates, it is difficult for many entrepreneurs to invest in new machines. We notice that entrepreneurs are therefore purchasing machines specifically for a project and selling them afterwards through so-called consignment auctions. The sale then provides entrepreneurs with liquid assets to purchase other construction materials needed for new projects.” In 2024, 109 construction companies have already participated in these consignment auctions by Troostwijk, where multiple parties offer lots in one auction.

The choice for online auctions is related to the larger market that the platform offers. “Both buyers and sellers can draw from a large digital network throughout Europe,” says Bakels. Thirty-three percent of buyers of construction machinery from Dutch entrepreneurs come from abroad. Eighteen percent of them are from Belgium and Germany. Another portion goes to Eastern Europe, primarily Romanian and Polish bidders.

Generational differences stand out
Troostwijk Auctions also observes generational differences among entrepreneurs regarding machinery use, not only in construction but also in other sectors. “While younger generations increasingly opt for leasing and renting, older generations preferred buying machines,” says Arno Hendrikse, Managing Director at Troostwijk Auctions Netherlands. “When many of these assets are on the balance sheet, a business becomes less attractive for acquisition. For this reason, we see more entrepreneurs choosing to downsize. This is particularly noticeable in the construction sector, where the space for medium-sized companies is shrinking between the large players and small, specialized SMEs.”