Construction market

The market forecasts below have been prepared by Navet. Considering the particularly uncertain market and geopolitical situation the forecasts are based on the following assumptions:

• The war in Ukraine can be contained geographically and the most acute phase will end during the year. Purely financial effects of the war are expected to be, among other things, significantly higher prices for energy and construction material, weaker growth and a cooler investment climate, cautious households and housing prices leveling off. 
• The supply of cement will be, through various temporary solutions, manageable during the forecast period. 
• A cautious increase in interest rates in Sweden, continued increases in Norway and unchanged interest rates in Finland.

Sweden

The financial situation in Sweden continued to develop positively in 2021. In total the GNP is calculated to have grown by close to five percent in 2021, driven by private and public consumption and gross investments. However, as a result of the war in Ukraine the positive trend has tailed off leaving its wake rising inflation and less inclination to take risks. The forecast for the GNP in 2022 has been adjusted down to slightly more than three percent. Total building construction investments in 2021 rose by slightly more than four percent driven by a robust increase in industrial building construction. Zero growth is expected in 2022 but developments are difficult to predict due to the risk of a long drawn-out and escalating conflict, rising interest rates and uncertain access to cement. Housing investments are expected to develop sideways this year and then turn up in 2023 while other building construction is expected to remain on the same level in both 2022 and 2023. After having grown at a good rate in 2021 civil engineering investments are expected to back down from a high level in 2022 .

Norway

The Norwegian economy continued to recover well in the latter part of 2021 and GNP is calculated to have grown by around four percent. Growth was largely due to positive developments for household consumption which benefited from a decrease in the unemployment rate and continued low interest rates. Growth is expected to continue at the same rate in 2022, despite rising interest rates and the effects of the war in Ukraine. A rapid drop in the unemployment rate is expected and household consumption will stay strong. It appears the total volume of building construction investments increased in 2021 due to the construction of single homes and more private premises. However, public building construction went against the tide and contracted last year. Zero growth in the total building construction volume is expected in 2022 and it seems the same is true for investments in housing and other building construction in 2022 and 2023. Investments in civil engineering are calculated to have increased considerably in 2021 and the forecast indicates even stronger growth in 2022.

Finland

The Finnish economy is calculated to have grown by about 3.5 percent in 2021, primarily driven by private and public consumption along with an increase in exports. The forecast indicates that financial growth can be around three percent in 2022, primarily driven by gross investments, exports and private consumption. The unstable situation in the world can, however, have a negative impact on exports. There is also a risk of rising energy prices and delivery disturbances in the wake of the war in Ukraine. The increase in building construction was more than ten percent in 2021 due to dramatic growth in industrial investments and new production of apartment buildings. The upturn in both housing investments and other building construction last year is expected to be followed by a downturn in 2022 and then level off in 2023. Civil engineering construction is calculated to have grown marginally in 2021 and the forecast indicates horizontal development for 2022.

Housing

	2022	2023	2024
Sweden
Norway
Finland

Forecast for production-started housing investments, new production and renovations
Source: Navet

Other building construction

	2022	2023	2024
Sweden
Norway
Finland

Forecast for production-started other building construction investments, new production and renovations (Industry, office/retail etc. and public premises)
Source: Navet

Civil engineering

	2022	2023	2024
Sweden			–
Norway			–
Finland			–

Forecast for civil engineering investments
Source: Navet

	Worse forecast compared to the previous quarterly report
	Better forecast compared to the previous quarterly report
	Same forecast compared to the previous quarterly report