Thijs Knaap, Chief Economist at APG, expects wages in certain sectors to continue rising for some time. He shared this view during the investors’ panel on the radio program BNR Zakendoen.
Knaap’s remarks were prompted by a report in the Dutch newspaper Algemeen Dagblad showing that nearly three-quarters of employers in the construction sector are struggling to find staff. “It is not surprising to see this happening now that population aging is setting in,” Knaap said. “In the Netherlands, we have saved extensively for our pensions over the past decades, and that money is now partly being spent.”
This, in itself, is not a problem, as long as sufficient goods and services are available in return. Even if fewer people are working, that does not necessarily pose an issue, Knaap continued, as long as we are able to import goods. “That is where the crux lies. We can buy cars, cosmetics, and other products from abroad because the Netherlands has built up foreign assets worth many billions. But for goods we largely produce ourselves, such as housing, the situation is more challenging, especially when there is a labor shortage. As a result, wages in sectors with structural labor scarcity, such as construction and healthcare, are likely to keep rising for the time being.”
The economist also discussed what rising inflation means for bonds. “For institutional investors, and to a lesser extent private investors, bonds often serve as an anchor in their investment portfolios. When equities fall, bonds normally rise, helping to stabilize the portfolio. That pattern held for many years, but not anymore. Inflation risk has caused bonds and equities to move in tandem, meaning they are now both taking hits.”
In addition to Knaap, the investors’ panel featured Corné van Zeijl, analyst and strategist at Cardano. The discussion also touched on the decline in gold prices and the pressure facing technology companies such as Google and Meta.