With growth of about 10 percent, the Scandinavian construction market continued its strong performance in 2016. Veidekke predicts a continued rise in construction investments in 2017 and 2018, although somewhat weaker than in 2016.
"There is still considerable variation between regions and market segments, but there is a clearer consensus now than a year ago on an optimistic outlook for the coming year," says Kristoffer Eide Hoen, Director of Analysis with Veidekke.
Norway: Still a good market, but growth rate will decline
In 2016, the positive trend continued with a growth rate of 6%, mainly driven by growth in housing investment and public buildings. For the coming years, Veidekke expects a growth in the Norwegian market of about 6% in 2017 and 4% in 2018. The housing market will remain a key driver, but government-initiated construction activity will also be important.
"This year and next year, we expect a continued good market, although the growth rate will decline. We expect the housing market to slow somewhat, especially in the Oslo region. This is one consequence of more and more homes coming onto the market, combined with regulatory measures on the demand side," explains Kristoffer Eide Hoen.
Sweden: Economy in good shape and very low interest rates
Overall growth in Swedish construction was estimated at 12% for last year. Housing played the greatest part in this growth. Towards 2018, Veidekke expects activity to gradually level off, but remain at a very high level, with market growth of 7% in 2017 and 3% in 2018.
"The economic boom and record low interest rates have led to a very strong market in Sweden. We still believe strongly in the Swedish market and expect a continued high level of activity, but not with the same growth as in 2016," says Hoen.
The Swedish housing market has remained very strong throughout 2016. Veidekke expects the future pace of sales to slow somewhat compared with 2016 and there may be a moderate decline in housing starts and investments as we enter 2018.
Denmark: Market driven by housing construction
Overall growth in Danish construction was estimated at 7% for 2016, and housing was the strongest contributor. In 2017 and 2018, Veidekke expects the construction market in Denmark to continue this positive trend, but it will still be mainly driven by housing. Regarding commercial buildings, we are at a turning point, although the recovery is likely to be modest to begin with.
"There are good conditions for increased construction activity and a more positive market situation in Denmark. Generally more positive developments in the Danish economy, good credit conditions and increased demand after many years of low investment levels are the most important drivers for the upturn," explains Hoen.
For more information, please contact:
Director Kristoffer Eide Hoen, tel. +47 97 67 54 34, kristoffer.eide.hoen@veidekke.no
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Veidekke is one of Scandinavia's largest construction and property development companies. The company undertakes all types of building and construction contracts, maintains roads and produces asphalt and aggregates. The company's operations are characterised by involvement and local knowledge. Revenue is NOK 30 billion (2016), and half of the 7,400 employees own shares in the company. Veidekke is listed on the Oslo Stock Exchange and has always posted a profit since it was founded in 1936.
This information is subject to the disclosure requirements pursuant to section 5 -12 of the Norwegian Securities Trading Act.
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| Presentation Economic Activity Report March 2017 |