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:

• Although the war in Ukraine is contained geographically it affects the market through significantly higher prices for energy and construction material, weaker growth and a cooler investment climate, cautious households and falling housing prices.
• Heavy inflation in 2022 that will diminish in 2023, which drives up interest rates during the period.
• The supply of cement in Sweden will be manageable during the forecast period but the market may be guarded in 2023.

Sweden

The war in Ukraine has led to broad and high inflation in the Swedish economy. Riksbanken has therefore dramatically raised the policy rate and made upward adjustments in the interest rate path. Rising prices and interest rates squeeze household purchasing power and increase costs for companies all the while demand is dwindling. The forecast for GNP growth in 2022 has been adjusted down to 2.4 percent and will approach zero in 2023. The total volume of production-started building construction investments is expected to contract by four percent in 2022. The downturn is primarily in apartment and industrial building construction investments while investments in offices, retail space and hotels are still growing. Both housing investments and other building construction are expected to decline in 2023. Civil engineering investments are predicted to remain on the same level in 2022 as in 2021 and then grow in 2023, partly because major investments are needed in green infrastructure and required to safeguard energy supplies.

Norway

The Norwegian economy recovered during the first half-year from the pandemic but now growth is slowing. This is because private consumption is expected to decrease due to rising prices for energy, food and goods. On top of that Norges Bank has raised the policy rate to 2.25 percent with more increases to come. Norwegian building construction investments developed well during the first half-year and are expected to be stable throughout 2022. Industrial construction investments are predicted to grow substantially while investments in single homes are expected to diminish by eight percent. All in all other building construction is expected to grow in 2022 and then contract in 2023. For 2023 a downturn is expected in both housing and other buildning construction. Investments in civil engineering are predicted to grow in 2022 and then level out and remain on the same level in coming years.

Finland

Growth of the Finnish economy has been impacted by the breakdown in trade with Russia, rising inflation and the unruly economic development in the world. Despite these challenges GDP is expected to grow by 2.1 percent in 2022 followed by zero growth in 2023. Household consumption is expected to decline and export companies need to find new markets to replace exports no longer going to Russia. The total volume of production-started building construction investments is predicted to fall by seven percent in 2022 with a downturn in both housing and other building construction. The exceptions are offices, retail space and hotels where an upturn is expected after the decline last year and the low level of investments during the pandemic. In 2023 investment levels are expected to stabilize. It is possible that civil engineering will remain on the same level as in 2021 during the next two years.

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