In the Netherlands we have a tendency to meticulously document every development in our nation. This has led to the awkward situation where our economy continues to grow on paper, while every relevant indicator seems to point in the exact opposite direction. Today I’d like to showcase an example of data that painfully contradicts the official story of a supposed continuing economic recovery: Empty shops and offices. Here we observe an accelerating trend towards economic collapse.
As can be seen in the images above, a sharp increase in the percentage of vacant offices and shops started around 2009, back when the economic crisis began in the Netherlands. Something interesting happened a few years later, when the total surface area of office space in our country reached a peak and began a decline that has continued until this day.
This decline in total office space is caused by the demolition of office buildings. Municipalities have started to finance the demolition of office buildings, because the epidemic of vacant office space has become problematic for the municipalities themselves. The private organization that own the offices would like to demolish them but often can’t afford the costs by themselves. The increase in demolition of office buildings is not sufficient however so far to decrease the vacancy rate, as the amount of utilized office space continues to contract rapidly.
What we see in the image above is the time offices spend unoccupied. Important to note here is that the increase almost entirely comes from offices that have not been used for at least three years. In other words, there seems to be a structural crisis here, one that oddly enough does not seem to keep businesses from continually building new office space.
Why do businesses continue to construct new office space, despite the growing abundance of unoccupied office space? A peculiar faith in perpetual economic growth seems to be responsible. Note for example that in a document from 2013, Rotterdam seems to assume that an extra 652.000 m² of newly constructed office space will be needed by 2020. This despite 20% of office space being unoccupied in Rotterdam right now.
Where is this new demand going to come from? There is no clear answer apparent. It seems to me a severe case of normalcy bias.