Finland

Overall construction activity

In 2021 the volume of construction increased by 2.0%. New building construction continued its rapid growth in new residential construction. New non-residential construction decreased by 1.1%. Investments in civil engineering kept growing in 2021 but at a slower pace than in 2020. Finland’s economy grew 3.5% in 2021. GDP will continue to grow but at a slower pace, around 1.0% in 2022. The war in Ukraine cuts forecasted GDP growth from 3.0% to around 1.0%.     

In 2022 total construction output will grow modestly. Housing starts are expected to decrease, but last year’s housing starts will continue to support residential building volume in the first half of this year. New non-residential construction is expected to grow this year although the War in Ukraine casts major uncertainty over investments in Finland. 

The growth rate of housebuilding renovations is anticipated to be around 1.0%. The volume of civil engineering is expected to decrease in 2022 by 1.0%.

Employment in construction averaged 188,000 people at the end of 2021 according to The Labour Force Survey. In 2018 the average unemployment rate in the construction sector fell to 6.3%. Employment in the construction sector is expected to stay at last year level in 2022.

Housebuilding

The level of housing starts will decrease from a high level in 2022. Households and investors demand is expected to decrease. We estimate 35,000-40,000 housing starts in 2022. The overall picture of the housing market is stable although the war in Ukraine has had negative impacts on consumer confidence. Building costs are also rising rapidly. Employment and earnings are expected to stay at a good level. In the long run the Finnish housing market is still boosted by urbanisation. The number of residential building completions will still stay very high during 2022. 

The prices of old dwellings increased rapidly in 2021. The price gap is still widening between the Helsinki region and other parts of Finland. Urbanisation will pick up pace in coming years after a short break caused by the Covid-19 pandemic. Urbanisation is at a low level in Finland compared to other countries.

Residential repair, maintenance and improvement work is increasing steadily in Finland. In 2021 the sector growth was quite modest. The pace will pick up in 2022.