Construction market

Sweden

Swedish macroeconomic recovery is proceeding slower than previously expected due to the global turbulence and ongoing shifts in trade policies. Private consumption has not accelerated as forecasted and the Riksbank reduced the repo rate by 0.25 percentage points to 2.00 percent. However, the turnabout is expected to emerge during the second half of 2025 with broader financial growth as a result. GNP growth in 2025 is estimated at 1.7 percent. Despite greater uncertainty at the beginning of the year housing construction is expected to continue to recover in 2025, albeit at a slower pace. The forecast for newly built premises has been adjusted downward marginally for 2025 although construction is expected to be above the historic average. While some industrial investments have slowed, construction of new premises is being supported by politically driven investments in the justice system and defense forces. In the same vein, recovery in renovations of both homes and premises is expected to accelerate in 2025. Total civil engineering investments are expected to increase by six percent in 2025. This is primarily due to expansion of the electricity grid, both local and regional grids and transmission grids, as well as higher investments in roads and railroads. In addition, investments in defense facilities, ports and shipping lanes are expected to be record-breaking high going forward.

Norway

Norway’s mainland GNP is expected to grow by 1.2 percent in 2025. Somewhat surprisingly Norges Bank reduced the repo rate unchanged in June by 0.25 percentage points to 4.25 percent because the bank saw a lower risk for higher inflation while financial activity in the country was weaker than expected. Real wage growth and low unemployment is expected to boost purchasing power and benefit the construction market. Sales of newly produced homes are expected to slowly increase in 2025, although the postponed drop in interest rates and high construction costs will delay the normalization of new production. Forecasts for premise construction have been lowered for 2025 but still point to a more positive market than the two previous years. Higher military investments and good development in certain industries are stabilizing developments while development in commercial property, offices buildings and educational facilities is weaker this year. The renovation market is expected to grow in 2025. Forecasts for 2025 indicate good growth in the civil engineering market after a downturn in 2024. The most significant driving force of growth is expected to be the increase in power and energy plants but maritime infrastructure and municipal technique facilities are also expected to grow. Civil engineering investments are calculated to rise by 2.4 percent in 2025.

Finland

Optimism about the Finnish economy among consumers and companies has begun to improve. After negative GNP development in 2024, GNP is expected to grow again in 2025 and is estimated to reach 1.0 percent. Inflation in Finland continues to contract and is expected to stay clearly under two percent during the year. Falling interest rates are beginning to shore up Finland’s economy although instable external factors continue to impact private consumption. The housing market has begun to recover in 2025 but the process is slow. As sales of homes on the second hand market accelerate sales of new homes are expected to follow, which will gradually lead to the start up of new housing production. Premise construction is expected to increase in 2025 driven by commercial, office and industrial buildings along with data centers and defense projects. Green investments also contribute to higher premise construction. Housing renovations will likely have slight development during the year while renovations on the commercial market will increase primarily due to energy renovations. After declining for several years investments in civil engineering are expected to grow in 2025, mainly due to higher infrastructure investments. Zero growth is estimated in operation and maintenance in 2025 even though the need for them is great.

Housing

	2025	2026	2027
Sweden
Norway
Finland

Forecast for production-started housing investments, new production and renovations

Premise investments

	2025	2026	2027
Sweden
Norway
Finland

Forecast for production-started premise investments, new production and renovations

Civil engineering

	2025	2026	2027
Sweden
Norway
Finland

Forecast for civil engineering investments

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

As of 2025 Prognoscentret provides market forecasts. Construction is divided into housing construction (new homes and renovation) and premise construction (new premises and renovation). Premises comprise all buildings except homes and agricultural buildings. Civil engineering includes new investments and operations and maintenance. The color of the arrows shows the comparison with Prognoscentret’s previous forecast.