Construction market
Sweden
Global uncertainty continues since the Iran war and the situation in the Strait of Hormuz has not yet been resolved. This has led to higher inflation expectations and rising market interest rates while analysts anticipate that the Riksbank will raise the policy rate within the next six months. Nonetheless, the Swedish economy has performed better than expected. Major government investments, good industrial activity and household consumption have contributed to this.
Although construction costs continue to rise housing construction is expected to grow due to financial improvements. Investments will likely increase, albeit from a low level. Even housing renovations are developing positively following the broader economic recovery.
Investments in premise construction have developed robustly and forecasts remain the same. The rate of new construction is rapid in public and industrial premises while there are notably fewer construction starts in offices and retail space. Investments in total defense and the judicial system are the primary drivers. The green transition and energy supply expansion benefit industrial construction. Premise renovation is expected to steadily increase in the coming years.
Total civil engineering investments are expected to continue to grow. The national plan for transportation infrastructure for the years 2026-2037 with higher investments in railroads and road maintenance, the expansion of the electricity grid and in water and sewage systems as well as more investments in defense will generate broad growth in the civil engineering market.
Norway
The underlying business cycle in the Norwegian economy is still relatively strong, supported by an expansive fiscal policy, major investments in defense and the energy sector as well as greater export revenues due to high oil and gas prices. At the same time inflation is still hovering above the target and Norges Bank is expected to keep the interest rate level high over a sustained period of time, which dampens the drive for consumption and investments.
Housing construction is expected to remain unchanged in 2026 before inching up from a low level. High interest rates and rising construction costs stymie development but population growth and a greater need for housing point to a gradual improvement. More housing projects in large growth regions will likely drive recovery. Renovations are expected to develop along the lines of previous modest growth.
Premise construction appears to have stabilized on a new, lower level even if somewhat stronger development than previously forecasted is expected in 2026. Although higher construction and financial costs hamper demand, investments continue to be made in data centers and traditional industrial and logistic buildings. Strong development is also expected in transportation and defense buildings. The existing building stock needs to be maintained and rebuilt which will gradually increase the need for renovations.
The prospects for the civil engineering market are unchanged. Investments are expected to grow primarily in power and energy plants as well as municipal technique facilities. Several major road projects are also expected to contribute in the coming years. The forecast for road operation and maintenance is moderate growth while the need for railroad maintenance continues to rise.
Finland
The Finnish economy is growing at a greater rate than previously predicted which has bumped up GDP projections. Although the war in Iran impacts energy and oil prices, inflation, interest rates and consumers’ confidence, its effect has not hit as hard as the earlier customs war. Unemployment remains high.
Housing construction will likely continue to recover slowly and the forecast for the current year has been lowered slightly. Continued excess supply of existing housing and weak demand as well as rising interest rates and high construction costs continue to thwart housing construction. Housing renovations have increased somewhat, supported by Finland’s improved economy.
Projections of financial growth have improved the conditions for premise construction where investments are expected to grow during 2026 and 2027 and thereafter contract. Development is driven by major projects that are ongoing or are expected to start, mainly data centers but start volumes in office and industrial buildings, hotels and restaurants are also on the rise. Premise renovation will remain dampened during the forecast period.
Investments in civil engineering are expected to decrease slightly in 2026, mainly due to fewer investments in railroad construction as well as energy and water supply which are, however, in need of major investments. Investments in roads and streets are expected to increase while zero growth is estimated in operation and maintenance.
Housing
| 2026 | 2027 | 2028 | |
| Sweden |  | | |
| Norway |  | | |
| Finland | | | |
Forecast for production-started housing investments, new production and renovations
Premise investments
| 2026 | 2027 | 2028 | |
| Sweden |  | | |
| Norway | |  |  |
| Finland |  | |  |
Forecast for production-started premise investments, new production and renovations
Civil engineering
| 2026 | 2027 | 2028 | |
| 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.
| Explanation | Symbol |
| Increase by more than 10% |  |
| Increase by 3-10% | |
| Unchanged ± 2% | |
| Reduction by 3-10% | |
| Reduction of more than 10% |  |