Construction market

Sweden

Although inflation is falling in Sweden and is considerably lower than at the beginning of the year, it is still high in relation to the inflation target. Sweden’s central bank has recently raised the repo rate to 4.0 percent and another raise of 25 more points is expected. The high level of prices has a negative effect on both consumption and investments, which is expected to result in Sweden’s GNP contracting by 0.7 percent in 2023. A severe decline in housing construction is expected in 2023 due to high costs, rising interest rates and falling sales prices for homes, which diminishes investment appetites and households’ ability to get financing. High prices and the deteriorating economy will also likely have a negative impact on other building construction in both the private and public sectors. Overall a broad decline in total building construction investment is expected in 2023 and the negative trend is expected to continue in 2024, albeit to a lesser degree. Civil engineering construction is showing a tendency to contract slightly this year but then have stable growth over the next two-year period. In a longer perspective, green investments and an expanded national plan for transportation infrastructure will create a good platform for development.

Norway

The Norwegian GNP is expected to grow just over one percent in 2023. After several interest rate hikes inflation is on its way down and the interest rate is reaching its peak. Unemployment is low but growth in new jobs has stagnated. Housing construction is contracting and the most negative development on the construction market this year is expected in new production of apartment buildings. While private premises are developing very well in other building construction there is a negative trend in public investments. In total, building construction investments appear to contract slightly in 2023 and 2024. Civil engineering construction is expected to grow in both 2023 and 2024.

Finland

The Finnish GNP is expected to decrease by about a half percent in 2023. The Finnish economy is challenged by diminishing external demand, rising interest rates and higher prices which strike broadly at business and household consumption and investments. In addition, many homeowners have seen their wealth shrink with the falling price of homes. Although the labor market is holding up pretty well unemployment is historically high. On the construction market, housing construction, with single homes in particular, is developing negatively while other building construction with private and public premises seems to be growing after last year’s decline. A decline is expected in total building construction investments in both 2023 and 2024. Next year the decline in the building construction market will be broader and mostly include both homes and premises. Civil engineering is expected to develop sideways in 2023 followed by a slight upswing in 2024.

Housing

	2023	2024	2025
Sweden
Norway
Finland

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

Other building construction

	2023	2024	2025
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

	2023	2024	2025
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