Construction market

Sweden

Inflation continued to deflate at the end of 2023 and it is believed that interest levels have peaked. The market is counting on several reductions in interest rates in 2024 and according to Riksbanken the first one may be announced in May or June. Sweden’s GNP contracted marginally in 2023, weighed down by shrinking consumption and investments. Growing unemployment, weak demand and continued high prices are having a detrimental effect on the economy in 2024 as well. Housing construction was almost halved in 2023 due to high costs and interest rates and households’ diminishing disposable income. This negative development is expected to continue in 2024 although at a considerably slower rate. Premise construction in the private and public sectors was also affected negatively by the higher costs and deteriorated economy in 2023 but the downturn was not as dramatic as the one in housing construction. Industry’s building construction investments developed horizontally. A broad decline in building construction investments is expected in 2024 followed by an upturn in 2025. Civil engineering construction is believed to have increased in 2023 due to wide ranging expansion in both the private and public sectors. Growth is expected to level out in 2024 followed by an upturn in 2025.

Norway

Weak domestic demand as well as lower consumption and investments led to marginal growth of about one percent in Norwegian mainland economy in 2023. Norway’s exports have been negatively affected by the modest economic growth in many of its trading partners. High interest rates and rising unemployment will most likely limit economic growth in 2024 as well. New production of housing drastically contracted in 2023, primarily in apartment buildings, and housing construction is expected to continue to contract in 2024. Regarding other building construction, industrial building construction investments increased while both private and public premise investments contracted. The total volume in building construction investments indicates zero growth in 2024 and a broad recovery in 2025. Civil engineering construction increased in 2023 and is expected to grow in 2024 but then level out in 2025.

Finland

The Finnish GNP contracted by a half percent in 2023 according to calculations. Household consumption diminished due to rising interest rates, continued relatively high inflation and increasing unemployment. The total investment volume shrank and exports dropped. In 2024 GNP is expected to continue to contract slightly as a result of lower consumption and investments. Housing construction of both single homes and apartment buildings decreased dramatically in 2023 and this development is expected to continue in 2024. Developments in other building construction were divergent, with more activity in the industrial and public sectors while office buildings and retail space declined. It looks like there will be a wide spread decline in total building construction volumes in 2024 due to high prices and a lack of economic growth. Weak recovery is expected in 2025. According to calculations there was a slight downturn in civil engineering in 2023 and this is expected to continue in 2024 followed by an upswing in 2025.

Housing

	2024	2025	2026
Sweden
Norway
Finland

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

Other building construction

	2024	2025	2026
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

	2024	2025	2026
Sweden			–
Norway			–
Finland			–

Forecast for civil engineering investments
Source: Navet

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