Construction market

Sweden

After the severe drop in GDP Sweden’s economy began to recover during the second quarter. Several forecasts and indicators point to a softer decline than feared. GDP is expected to contract by around 4.5 percent this year and gross investments by some 8.5 percent. Housing construction is expected to continue to decline this year at the same time price levels for existing single houses and tenant-owned homes continue to rise driven by the housing shortage, low new production volumes and a stable interest level. A shift in behavior due to COVID-19 in combination with a downturn in the business cycle can have a negative effect on the need for private premises such as offices, hotels and commercial space. However, public building construction can grow this year due to greater needs and investments from the state and municipalities. The forecast for civil engineering investments indicates a stable level during both 2020 and 2021 with a particular focus on investments in roads, railroads, water and sewage and energy related projects.

Norway

The Norwegian economy has begun to recover after the dramatic decline in the spring but it will take until 2021 before activity is on the same level as before the breakout of corona. Manufacturing has been hit hard by measures taken to control the spread of the virus, reduced international demand and the plunge in oil prices. Housing construction is expected to contract this year and the next due to less growth and rising unemployment. The forecast for premise construction indicates positive development in 2020-2021 where private building construction is expected to grow this year before it declines in 2021. The government’s economic policy has been robust and there is room for investments in public sector and civil engineering construction, which are expected to grow during the period 2020-2021 and act as a cushion for the construction market.

Finland

Finland’s economy has held up better than expected. Forecasts for both the total GDP and household consumption have been adjusted positively. All in all growth in the economy is expected to contract by around four percent in 2020. Total housing investments will most likely fall in 2020-2021. Industrial building construction is also expected to decline during the same period. However, the outlook for office and retail construction continues to be bright this year. The forecast for public building construction investments has been adjusted positively and indicates zero growth this year and an increase in 2021. The outlook for civil engineering investments is also looking up. An upturn is expected this year followed by a downturn next year.

Housing

	2020	2021	2022
Sweden
Norway
Finland

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

Other building construction

	2020	2021	2022
Sweden
Norway
Finland

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

Civil engineering

	2020	2021	2022
Sweden			–
Norway			–
Finland			–

Forecast for civil engineering investments
Source: Navet Analystics

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