Amsterdam’s Economy Shows Modest Growth Amid Ongoing Challenges

Amsterdam’s local economy is projected to expand by 1.6% in 2025, with growth grounded primarily in the business services and information and communications technology (ICT) sectors, according to the latest economic forecasts released this week by the Amsterdam municipality’s research division.

The projected increase is significant in the context of a year marked by persistent challenges such as a severe housing shortage, a tight labor market, and concerns over overtourism. Residents and policymakers alike continue to grapple with balancing economic vitality against infrastructure and social pressures.

Economic growth driven by business and ICT

The city’s economy remains heavily service-oriented-the sector accounts for 23.2% of the Netherlands' total GDP-with business services and ICT thriving as key contributors to the region's economic health. Amsterdam’s role as a tech hub has been strengthened by these sectors, which are expected to sustain the city’s steady economic expansion in 2025.

However, while the economy grows, the city faces a record low in attracting foreign businesses. In 2024, only 49 companies established themselves in Amsterdam, creating 1,458 new jobs-a sharp decline from previous years (84 in 2023 and 161 in 2019). This downturn is attributed mainly to ongoing housing shortages and constraints on the electrical grid, which hamper new business setups and expansions.

Tourism boom and labor market pressures

Tourism continues to play a large role in the city’s economy. Post-pandemic visitor numbers surged by 138% in 2022 to reach 6.9 million, fueling a local economy that grew by 4.5% that year. Yet, the influx has spurred concerns about overtourism, with residents feeling the strain on amenities, living costs, and infrastructure. City regulators have responded with measures such as bans on cruise ships and limits on tourist numbers in sensitive areas.

Meanwhile, the labor market remains tight. As of 2022, the Amsterdam Metropolitan Region experiences a shortage of available workers to fill vacancies-44 unfilled jobs per 1,000 positions-with only one short-term unemployed person available per six vacancies. This scarcity is expected to persist, limiting the pace at which businesses can expand despite growing economic demand.

Amsterdam is also leading European efforts in sustainability and circular economy initiatives: 11% of metropolitan employment is in circular jobs, above the national average. The city aims to cut raw material use by 50% by 2030 and achieve full circularity by 2050-a strategy that integrates economic and environmental goals.

With 541 night venues supporting over 5,000 jobs, Amsterdam’s nightlife economy continues to be an important facet of its cultural and economic landscape, engaging 90% of residents actively and drawing global attention through events like the Amsterdam Dance Event (ADE).

Looking ahead for businesses and residents

For local businesses and workers, the outlook is cautiously optimistic. While growth prospects remain positive in the near term, the structural challenges of housing, labor shortages, and infrastructure constraints require ongoing attention from city policymakers.

Residents can expect continued efforts to balance growth with quality of life, including focused programs addressing overtourism and sustainable development. Entrepreneurs should keep abreast of city planning initiatives that may affect the availability of commercial and residential space, as well as emerging opportunities in the circular economy and digital sectors.

The city’s adherence to strict nightlife policies and long-standing cultural programming also signals ongoing support for sectors that maintain Amsterdam’s global reputation as a vibrant, diverse city.