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 but it affects the market through 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 in Sweden will be manageable during the forecast period but the market may be guarded in 2023. 
• Gradual increase in interest rates in Sweden, continued increases in Norway and unchanged interest rates in Finland.

Sweden

The outlook for the Swedish economy has dimmed in the wake of rising inflation and interest rates as well as material and component shortages stemming from the war in Ukraine, along with the lingering effects of the pandemic. However, the underlying demand in business is strong and the unemployment rate is falling. Nonetheless, household consumption is getting squeezed by higher prices. The forecast for the GNP in 2022 has been adjusted down to 2.5 percent. Total building construction investments are expected to contract somewhat during the year due to declining apartment building investments and a negative turn in industrial investments. At the same time construction in private and public premises is keeping the downturn at bay and zero growth is expected in 2022. Both housing investments and other building construction are expected to decline in 2023. The forecast for civil engineering construction indicates an increase this year followed by a slight decline in 2023.

Norway

The Norwegian economy has recovered from the pandemic and is now headed for a boom. The unemployment rate is the lowest it has been since before the 2008 financial crisis. Mainland GNP has not been adjusted downward despite the war in Ukraine and is expected to increase by 3.7 percent this year, primarily due to intense growth in household consumption. Growth is forecasted for gross investments, in large part because of the high price of oil. The total volume of building construction investments will probably grow at a good rate in 2022. Industrial developments will be the main motor and even construction of private and public premises are accelerating. However, single home construction is an exception and no growth is expected in total housing investments in 2022. In 2023 the total building construction volume is expected to level out since housing investments will contract while other building construction will increase. The forecast indicates that civil engineering construction will develop very well this year while zero growth is expected in 2023.

Finland

Growth of the Finnish economy has been hampered by the Russian invasion of Ukraine. In 2022 the Finnish economy is expected to grow by about 1.8 percent in 2022, which is about half as much as in 2021. However, rapidly rising employment and continued negative interest rates provide some support for household consumption. Building construction investments, both housing and other building construction, are expected to fall dramatically this year after an upturn last year. The biggest drop can occur in new production of apartment buildings and industrial investments. Other building construction is expected to recover somewhat in 2023 while housing construction will continue to decline. It appears civil engineering construction will level out in both 2022 and 2023.

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