Sweden

Overall construction activity

Global growth is being held back by increased trade barriers, geopolitical instability, and renewed concerns about inflation. However, the Swedish economy continues to recover, albeit at a slower pace. In the construction industry, investments are turning upward this year as the housing sector stops weighing down development. Next year, construction investments will grow significantly faster than the economy as a whole. This is mainly due to the continued upturn in the housing sector as well as increased infrastructure investments, particularly in the energy sector and rail-bound infrastructure.

Overall, construction investment increase by over 6 percent over the forecast period, and the upturn is broad-based, with all subsectors contributing positively. The rise in investments leads to a halt in the decline in employment, which instead begins to rise moderately next year. In total, employment increases by only 0.4 percent, or by just under 1,500 people, between 2024 and 2026

Housebuilding

Residential construction, which bottomed out at just over 28,000 housing starts last year, is rising slightly both this year and next, reaching a level of just under 31,000 starts by 2026. Higher housing prices, lower interest rates compared to the previous year, and rising real disposable incomes contribute to a somewhat higher level of housing production during the forecast period. Overall, new residential construction investments will remain unchanged this year and then increase by 7 percent next year.

Re-building investments, which declined last year, are rising slightly this year, partly driven by households’ increasing real incomes. Next year, it is primarily the investments by property companies that drive the growth in rebuilding investments.

Non-residential construction

Non-residential buildings investment, which rose by 5 percent last year, continue to grow throughout the forecast period. This year, the increase is mainly driven by the commercial real estate sector and government initiatives in defense and correctional facilities. Next year, the growth is primarily driven by industrial property investments, particularly in the counties of Dalarna and Blekinge, as well as continued investments by municipalities and regions in new public service buildings.