Dutch SMEs Postpone Investments Amid Rising Costs and Uncertainty

Small and medium-sized enterprises (SMEs) in the Netherlands are increasingly delaying investments such as purchasing new delivery vans, staff training, or renovating business premises, according to research by the SRA accountants' cooperative. Entrepreneurs are holding back due to concerns over escalating costs, geopolitical instability, and evolving regulations. The financial health of businesses is also a significant factor, with approximately half of SMEs reporting lower profits in 2025 compared to the previous year, according to SRA board member Pieter van der Kwaak. This reduced profitability leaves less capital available for investment.

The construction, hospitality, and retail sectors are particularly affected by reduced investment capacity, facing higher personnel and procurement costs. In contrast, specialized business services like law firms are less impacted by material cost increases, retaining more funds. When profits are made, entrepreneurs prefer to save them rather than spend them, Van der Kwaak noted. Uncertainty surrounding regulations and subsidy schemes also plays a role. For instance, fluctuating policies on environmental zones led some SMEs to invest in electric vans that later became unnecessary, causing financial strain. SMEs also exhibit low confidence in government subsidies, as successful funding pots are quickly depleted or existing schemes are phased out, hindering long-term business planning. This trend of declining SME investment, which has been ongoing for years, has serious consequences, including a decline in knowledge and skills, a lack of modernization in services and products, and diminished competitiveness in international markets, according to lector of SME financing Lex van Teeffelen.