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
Economic growth will be constrained by the introduction of austerity measures by the incumbent government. Significant fiscal cutbacks will dampen disposable income and consumer spending during 2015-2016.
Belgium's extremely high national debt continues to leave it exposed to a potential deterioration in economic growth exasperating debt servicing pressure and also the possibility of yields increasing due to eurozone instability.
Major Forecast Changes
We have revised down our 2015 real GDP growth forecast to 1.3% from 1.6% previously.
In light of...
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 of 537,843 units. However, we believe that a deteriorating...
Belgium Freight Transport
Following a year in which BMI saw increasing freight volumes in Belgium, 2015 will signal further growth across the whole of the country's freight transport sector in line with its macroeconomic outlook.
Total trade is projected to pick up with our Country Risk desk forecasting a year-on-year (y-o-y) increase of 4.15% in 2015 following an estimated growth of 2.0% in 2014.
Road freight is to continue to dominate the sector and is projected to grow by 1.6% in 2015. 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 further growth is projected at the country's top seaport of Antwerp.
BMI View : The Belgian insurance sector is a mature one with all the benefits and downsides that this implies. Across all segments of the market we do not anticipate other than sluggish growth in all sectors in local currency terms. Not least this is the result of continuing concerns about all Eurozone economies and their tentative return to health.
Notwithstanding such poor growth prospects, the market is a profitable one, pretty much across the board, as a result of disciplined underwriting and significant insurance company assets. Loss ratios are acceptable in all sectors. Many of the country's biggest operators are part of multi-national composite groups with significant financial backing. Whatever growth is possible will come principally from rising premiums rather than increased volumes. Over...
Belgium Medical Devices
BMI 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 estimated at...
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.
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. Recent planned investments by ExxonMobil in the Antwerp refinery highlights Belgium as one of the most attractive downstream destinations in Europe's struggling refining sector.
The Belgian petrochemicals industry is attracting investment due to its strong infrastructural advantages, but could still feel the effects of a downturn in the eurozone that would threaten profit margins, according to BMI's latest Belgium Petrochemicals Report.
Belgium hosts leading petrochemicals companies with a strong and well integrated value chain. Antwerp's status in terms of both high-quality and cost-effective production, as well as extensive access to markets and its infrastructure are appealing to petrochemicals players as is its open economy with foreign trade representing more than 80% of GDP.
However, a lack of domestic markets for Belgian petrochemicals output exposes it to strong external risk. Belgium is specialised in only a few segments and risks being outflanked by high volume producers in the Middle East, which have indigenous hydrocarbons resources. There is also limited...
Pharmaceuticals & Healthcare
Belgium Pharmaceuticals & Healthcare
BMI View: Belgium boasts a fair and transparent regulatory regime which, in addition to a progressive business environment, has been instrumental in retaining the country's appeal as a strategic regional hub for multinational drugmakers. Notwithstanding a particularly sluggish recovery from the eurozone crisis, per capita pharmaceutical expenditure remains markedly above the regional average and widespread access to healthcare will continue to support already high demand for treatments. While fiscal pressures threaten the sustainability of this system, in the short term, measures to contain drug prices and restrain public spending will be softened by the constitutional obligation to provide access to high quality health services....
BMI View : Better than expected growth in the mobile market and higher usage of operator-billed services were seen in the third quarter of 2014. In part, this was due to an intensification of price competition and the withdrawal of a number of MVNOs, allowing key players to deepen their influence over the market. The rollout of 4G services also played a key part in this more buoyant growth story. Nevertheless, the cold truth is that the market is now highly saturated and there are few organic growth opportunities left for the remaining players to tap. Convergence-led strategies provide one lifeline, but only Proximus can directly benefit as Mobistar has yet to relaunch its TV-led wireline business and BASE has withdrawn its TV offer and scales back...