report of the managing board
In 1975 the weak spots in the Dutch economy became visible
everywhere. It became clear that we have to cope not only with a
temporary cyclical set-back but also with a number of structural
problems, which cannot be solved or can only be solved in the
course of years. The most marked indication of the distortion of our
economy is the further increase of the labour income quote to 95.5
per cent.; at this figure there can be no question of a profit-earning
industry.
In spite of the fairly general economic recession our company as a
whole has experienced a very satisfactory year. We think this is the
result of the composition of our package of goods and services,
which, as was also found during the past years, is doing well in the
economic field of forces. Of course this is not a pure coincidence;
indeed, it is the first duty of an entrepreneur to consider the future
demand for services and products; this can only be done by
reading timely the signs of the time.
In the past we did this by becoming interested in the development,
operation and sale of real estate, while maintaining the orthodox
mortgage bank business. In doing so, we could avail ourselves of
the resources and know-how available in our company. Building
up a well-selected real estate portfolio provided us with a buffer
against progressive inflation, one of the most serious complaints
from which an economy may suffer. Further developments of our
activities were always intended to support our main business.
Wherever possible, we always tried to use our own know-how;
where this was insufficient we started joint ventures with other
companies. Thus we have various forms of co-operation in many
fields with other companies.
This policy enabled us to undertake many activities with a
comparatively small but, of course, highly qualified staff. It means
that, relatively speaking, we are not very susceptible to the effects
of high labour costs and can adapt ourselves more quickly to the
altered circumstances.
Throughout the years we have seriously criticized the rent and
subsidy policies adopted by the Government. These policies were
responsible for an additional demand for housing accommodation,
which more and more obscured the actual, effective demand. This
aroused two forces: on the supply side an overcapacity in the
building industry, on the demand side an undervaluation of living
comfort.
The distortion was partly obscured during the past years by an
additional demand as a result of a real improvement in incomes;
now that the growth has stopped we are rudely confronted with a
structural overcapacity in building.
In the meantime the Government has become aware that our
collective pattern of spending needs adjusting, if at least some
scope is to remain for the private sector. It is difficult to imagine
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