Our comprehensive assessment of Belgium's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Belgium, as well as the latest industry developments that could impact Belgium's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Belgium before your competitors.
Belgium Country Risk
Despite enjoying a relatively stronger recovery than several other eurozone Member States , the Belgian economy is nonetheless vulnerable to the lingering crisis in the single currency area .
A particular c oncern is the national debt which , at close to 100% of GDP, leaves Belgium exposed to a deterioration in risk sentiment and slowdown in economic growth.
Major Forecast Changes
We have revised down our 2014 real GDP growth forecast to 0.9% from 1.2% previously.
Belgium Industry Coverage (9)
As of end-August 2014, the Belgian new vehicle sales market was down by 0.8% year-on-year (y-o-y), at 395,126 units, according to figures from Febiac (the Belgian motor car and motorcycle association).
Breaking down the headline figure, passenger car sales stood at 351,732 units for the Jan-Aug period, down slightly on the 354,581 units sold over the first eight months of 2013. However, HCV sales (over 16 tonnes) were up by 13.8% y-o-y, at 4,336 units, with medium HCV sales (3.5 - 16 tonnes) up by 2.2%, at 1,052 units and bus sales up by 47%, at 780 units. When these three figures are added to the 37,226 LCVs sold year to date (down 3.% y-o-y), this gives a total of 43,394 CVs sold over 8M14, again down slightly on the 43,743 CVs and buses sold over 8M13.
On current sales trends, this would suggest some upside to BMI's current forecast ofÂ 537,843 units. However, we believe that a deteriorating...
Belgium Freight Transport
Following a year in which BMI believes saw mixed dynamics across Belgium's freight transport sector, 2014 will signal growth in all freight modes, in line with the country's macroeconomic outlook.
Total trade is projected to pick up with our Country Risk desk forecasting a year-on-year (y-o-y) increase of 4.0% in 2014 following a growth of 1.4% in 2013.
Road freight is to continue to dominate the freight mix in Belgium and is projected to grow by 0.5% in 2014. However, the mode did not manage to defy the downturn and so far appears to be struggling to recover to its pre-2008 volumes.
BMI notes that inland waterway freight, having fully recovered its 2006 levels, continues increasing its share in Belgium's freight mix, while the return to growth and the recovery of pre-downturn box throughput level are projected at the country's top seaport of Antwerp...
BMI View : A s of late 2014, the most recent developments highlight the strengths of Belgium's financially strong insurers in the context of mature life and non-life segments. Several of the leading players have reported good growth in earnings from their life insurance operations in spite of slippage in premiums. One of the majors has achieved a surge in life insurance premiums thanks to an active sales campaign. Distribution strategies and higher prices (although not volumes) have boosted revenues in the non-life segment as well. Taking a long-term view, the Solvency II and Basel III regimes may enable the insurance companies to emerge as major mortgage lenders in Belgium. In the meantime, though, premiums will hardly grow in USD terms in either of the main segments.
Over the coming years, currency movements will contain the development of...
Belgium Medical Devices
Espicom Industry View : Belgium remains one of the fastest growing markets in Western Europe with a US dollar CAGR of 3.4 % forecast for the 2013-2018 period . The rising health needs of the expanding elderly population and the current drive to improve the care of patients with chronic conditions should result in a steady expansion of the medical device market, although cost containment measures such as the increasing use of cost benefit analysis to determine reimbursement policies and proposed price fixing for implants and other reimbursable medical devices will constrain growth rates to some extent.
Headline Industry Forecasts
The medical device market in 2013 was...
BMI View: Belgium ' s steel sector is starting to enter a period of relative stability. Having witnessed significant decline over recent years, we are now beginning to see production levels stabilising due to gradually improving consumption levels and the diminished output capacity of producers. Â
As we move into 2015, there are increasing signs that the depression in Belgian steel production has bottomed out. Total output grew by 4.5% year-on-year (y-o-y) during the first eight months of 2014 to September, with full year growth estimated at 3.6%. With production forecast to average just over 1% a year over 2015-2018, we expect output to have found a stable footing following periods of sharp contraction, intermingled with sharp rebounds over the past few years....
Oil & Gas
Belgium Oil & Gas
BMI View: Belgium's Oil and Gas sector offers little upside for growth due to a lack of indigenous reserves. A small amount of unconventional exploration may be possible targeting Belgium's coal-bed methane, but the potential exit of one of the country's key energy companies is likely to negatively impact the rate of development. Belgium is expected to remain dependant on imports throughout the forecast period with limited potential to attract any major investment in the near term despite mature infrastructure in the country.
The main trends and developments in Belgium's oil and gas sector are:
Although we forecast both gas reserves and production to remain at zero, we highlight efforts by Dart Energy and NVM's joint venture Limburg Gas that will help to determine...
BMI's Belgium report examines the short-term trends in the Belgian petrochemicals market as the country struggles with the effects of the eurozone sovereign debt crisis. It also assesses the growth and investment strategies of leading players in the industry and how these will drive Belgium's competitiveness in the long-term.
Belgium has, like other countries in Western Europe, experienced a decline in petrochemicals consumption and output as a result of reduced economic activity and contagion from the eurozone debt crisis, which will remain a key threat to economic growth and stability over the medium-term. Overall industrial output growth declined to 1.5% in 2012 (from 3.0% in 2011) as the country entered recession. There is growing slack in industry as reflected in the drop in capacity utilisation rates to 76.9% in Q312, from a cyclical high of 82.6% in Q211. Nevertheless...
Pharmaceuticals & Healthcare
Belgium Pharmaceuticals & Healthcare
BMI View: Â Multinational firms find Belgium to be an attractive investment destination as a European hub for clinical trials, new drug development and niche research. Even though per capita spending on pharmaceuticals is relatively high, it is subjected to continual downward pressure from Eastern Europe and Asia, which translates into growth opportunities for generic drugs. However, prescribers' brand loyalty, pay-to-delay deals, the near-universal unpopularity of commodity generics and a lack of perfect competition in the pharmaceutical sector constitute key impediments to further generic expansion.
Headline Expenditure Projections
Pharmaceuticals: EUR5.83bn (USD7.70bn) in 2013 to EUR5.79bn (USD7.76bn) in 2014;Â -0.62% in local currency terms and 0.9% in US dollar terms....
BMI View : The Belgian mobile market is highly saturated and BMI believes it offers little scope for organic growth. This has lead many subscribers to opt Â for MVNOs over MNOs, with MVNO subscribers growing by 10.7% in 2013 and accounting for over 15% of the mobile market. It is therefore unsurprising to BMI that international MVNOs are looking to enter the market, with FreedomPop announcing a partnership with BASE in July 2014 and we expect more to follow. Further growth opportunities will come from the use of mobile data, which will enable the operators to boost their non-voice revenues. Proximus, BASE and Mobistar have all deployed commercial launches of 4G as of May 2014 and demand for this higher value technology will begin to pick up in 2014-2018. Competition will pick up in the fixed-line sector as Mobistar looks to re-...