Overall construction activity
The high level of activity in the construction sector in the previous years has been driven by high demand for residential buildings and political initiatives.
A decrease in construction activity is expected in 2023 and 2024 due to the high level of inflation and the increasing interest rates. Combined with high prices for materials it increases the uncertainty in the sector. The overall level of investment is expected to fall with 12,5 % in 2023 and 0,1 % in 2024.
In the light of the decreasing level of activity in the construction sector employment will fall. In 2023, employment is expected to fall by 9 800 persons with an additional fall in 2024 of 6 000 persons.
Housebuilding
Between 2020 and the beginning of 2022, the number of houses sold in Denmark was extremely high, but the situation has been reversed. The time between listing a house and selling it has started to increase and prices are falling. In addition, rising interest rates and high energy prices have increased the cost of living. The housing market has therefore cooled down.
The number of new residential dwellings peaked in 2019 at 41 000. It then fell to 33,000 in 2022 and from there an increasing decline is expected. The expected number of new residential units in 2023 and 2024 is 24 500 and 21 000 respectively.
The renovation of residential buildings also reached a high level in previous years, partly due to the high number of exchanged houses. In addition, the renovation of social housing contributed to the high level of renovation of residential buildings.
In the coming years, renovation activity is expected to fall as the number of trades houses will decrease combined with the increasing interest rates.
Non-residential construction
The activity within the non-residential buildings segment has been on a high level in previous years. The combination of a higher level of inflation and increasing interest rates has led to more pessimism, and the economic sentiment indicator to fall. The uncertainty of the future leads to a fall in the activity, but still at a high level.
GDP 2022
BILLION
POPULATION 2022
Total investment in construction in 2022
BILLION
Civil engineering
The activity in civil engineering is expected to increase with 14 % in 2022, 1 % in 2023 and 4 % in 2024. The increase in activity is driven by investments in water, energy, and digital infrastructure, partly due to the green transition. The demand for district heating has also increased. On the other hand, public investments is expected to decrease slightly, but not enough to change the overall direction of the activity.
Prices of construction materials
The prices of construction materials have risen sharply in the last couple of years. It has contributed to lower the demand of construction activity and has been a source of great uncertainty.
Per cent variation of investment in real terms of previous year
Number of building permits in residential construction
