Construction market
Sweden
Despite geopolitical tensions the macroeconomic situation has stabilized. Households have regained confidence and several economic indicators have seen an upturn. Interest rates have improved in step with the gradually decreasing policy rate, which is expected to remain on the same level in 2026.
Housing construction recovery is expected to gradually continue in 2026, albeit from a low level. Lower interest rates, an expected relaxation of home loan regulations and price stabilization on the second hand market will most likely augment demand. High construction costs and the copious offer of existing homes are, however, two important factors that hold back a more robust development of new production.
Investments in premise construction are expected to grow in 2026 after declining for a few years. This development will be supported above all by politically driven investments in the justice system and defense forces, along with investments in datacenters. Development in the renovation market is expected to be slightly positive in housing and somewhat more cautious in premises, where renovations are needed in schools and care buildings along with a growing demand for energy renovations.
Total civil engineering investments are expected to continue to increase in 2026. The new national plan for transportation infrastructure for the years 2026-2037 with higher investments in railroads and road maintenance, expansion of the electricity grid, water and sewage systems as well as more investments in defense generate broad growth in the civil engineering market.
Norway
Activity is expected to increase somewhat in the Norwegian economy and Norges Bank calculates a 1.5 percent increase in 2026. Norges Bank cut the interest rate twice in the autumn of 2025 to help lower inflation without hurting growth possibilities. Real wage growth and low unemployment are expected to boost purchasing power and benefit development in the construction market. However, despite the two latest cuts, interest rates are still high and so the interest burden is holding back households’ demand in the housing market.
A gradual increase in housing construction is predicted in 2026 although construction costs and interest levels are slowing down recovery. Home renovations are expected to show continued stable growth.
Production-starts of premise construction remain on a low level but the forecast for 2026 points upwards. The continued high cost of construction and interest levels also have an impact on premise construction. Growing defense investments contribute to development in the premise market although the effects are not yet tangible. However, the large existing building stock needs to be maintained and rebuilt which will gradually increase the need for renovations, which are expected to grow in 2026.
An upturn is expected in the civil engineering market in 2026 compared to 2025. Investments are expected to grow primarily in power and energy plants, railroad and streetcar facilities as well as municipal technique facilities. The forecasts for operation and maintenance are moderate for 2026 but growth will accelerate again in 2027.
Finland
Inflation in Finland is expected to remain under two percent going forward, which together with higher wages and falling interest rates will improve consumers’ purchasing power in the coming years. At the same time growth is hampered by global uncertainty and the rate of unemployment in the country.
The housing market is expected to recover in 2026 from low levels, even though the market continues to be cautious and hindered by excess supply and continued sluggish home sales.
Despite the uncertainty, premise construction is expected to increase and drive new production in the construction industry. Office and industrial buildings along with data centers and in particular defense and infrastructure projects are the driving forces. Renovations have developed weakly in recent years and demand in 2026 is expected to be hampered by high renovation costs, even though they are needed and there is potential for growth.
Investments in civil engineering are expected to continue to cautiously grow in 2026, mainly due to higher infrastructure investments. Zero growth is estimated in operation and maintenance, even though the need 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.
| Explanation | Symbol |
| Increase by more than 10% |  |
| Increase by 3-10% | |
| Unchanged ± 2% | |
| Reduction by 3-10% | |
| Reduction of more than 10% |  |