Finland

Overall construction activity

In 2022, the volume of construction increased by 1,3%. New residential construction continued its rapid growth. New non-residential construction falls by 0,2%. Investment in civil engineering continued to decline in 2022 at a faster rate than in 2021. The Finnish economy will grow by 2,1% in 2022. GDP is expected to fall by around 0,2% in 2023. The aftermath and uncertainty of the war in Ukraine will reduce GDP growth.

In 2023, total construction output will fall by 3,5%. The number of housing starts is expected to fall by 10 000. The volume of residential construction is expected to fall sharply in 2023 and 2024. Non-residential construction is expected to grow.

The growth rate of housebuilding renovations is anticipated to be around 1,5%. The volume of civil engineering is expected to decrease in 2023 by 2%.

According to the Labour Force Survey, construction employment averaged 185 000 people at the end of 2022. In 2022, the average unemployment rate in construction fell to 5,8%. Construction employment is expected to decline in 2023.

Housebuilding

The level of housing starts will fall sharply in 2023. Demand from households and investors is expected to fall. We estimate 27 000 housing starts in 2023. The overall picture for the housing market is very difficult, as the war in Ukraine has had a negative impact on consumer confidence and interest rates have risen at a historically fast pace. At the same time, the number of housing completions will remain very high in 2023. On the upside, employment and income are expected to remain at good levels. In the long term, the Finnish housing market will continue to be driven by urbanisation.

 

Prices of older dwellings fell sharply in 2022 across Finland, but especially in the Helsinki region and other urban areas in Finland. Urbanisation has resumed after a short pause caused by the corona. Compared with other countries, urbanisation in Finland is at a low level.

 

Residential repair, maintenance and improvement work is increasing steadily in Finland. In 2022 the sector growth was quite modest. The pace will pick up in 2023.

Non-residential construction

In 2022, growth in new non-residential construction will remain at last year's level. 

 

The construction of commercial and office buildings is expected to grow moderately. Investment in industrial and storage buildings is expected to increase due to the green transition.

 

New construction in the public sector has grown steadily since the 1990s. The main drivers are the ageing population and ageing buildings. In 2023 public construction is expected to slow down. 

 

Overall, we expect the volume of non-residential construction to grow slightly this year. Due to the sharp decline in residential construction, non-residential construction will be the main driver of residential construction in the coming years.