Overall construction activity

The most powerful global monetary tightening in 40 years is dampening the world economy this year, but China's reopening provides an injection that will enable global growth to pick up speed in 2024. However, the Swedish economy will be weighed down by the decline in construction investments as the construction of new homes collapses. Next year, the Swedish economy will start to recover when Sweden’s central bank, the Riksbank, starts to cut the policy rate and household consumption picks up. For the construction industry, the rise in non-residentials and civil engineering investments will dampen the effects of the downturn in the housing sector in 2024.

Last year's sharp interest rate hikes among the world's central banks are leading to a weaker global economic growth in 2023, but with China's reopening and a downturn in inflation rates, there are some hopes for global growth to accelerate next year. For Sweden, the development this year is slowed down by high inflation and interest rate hikes causing a collapse in housing construction and households tightening their budgets. Furthermore, foreign trade is dampened by the global recession. Next year, growth can pick up again as inflation falls back to the 2 percent target, the Riksbank starts to cut interest rates, and both household consumption and exports increase. Overall, Sweden's GDP will decrease by 1.6 percent this year, and increase by 1.2 percent in 2024.


Residential construction plummets and weighs down the construction industry in 2023-2024. The decline in new housing construction, which began to fall already last year, will accelerate this year. Falling house prices, rising interest rates, increased construction costs, falling real disposable incomes among households, and the phasing out of investment subsidies are driving the decline in residential construction this year. Next year, the decline in new construction can be reversed to a moderate upturn when interest rates are lowered, housing prices stabilize, and incomes rise. Overall, new construction investments will decrease significantly this year (-42%) and continue to fall in 2024.


The repair and maintenance investment, which declined last year, continues down this year. The reasons behind this are rising material prices, continued rising interest rates, and falling real wages. Next year, the decline is interrupted with the help of interest rate cuts from the Riksbank.

Non-residential construction

Non-residential investments, which increased by 2 percent last year, temporarily turn down this year. Next year, the sector will once again show positive growth when both private and public investments increase, thanks to investments within the agricultural sector and in manufacturing industries, as well as increased government investments in buildings linked to the Swedish defence.

GDP 2022




Total investment in construction in 2022


Civil engineering

The civil engineering investments, which remained unchanged last year, there is a decline this year due to decreased financing of public infrastructure- construction. The private side of the civil engineering investments is increasing throughout the forecast period, 2023-2024. This is primarily driven by an increase in the energy sector. Next year, when the public volume also increases, the total construction investments increase. The total civil engineering investments is expected to decrease by 1 percent in 2023 followed by an increase around 3 percent in 2024.


Overall, construction investments decrease by nearly 15 percent over the entire forecast period. This is mainly due to the decline in new residential construction. The sharp decline in investment leads to a continued decline in employment in the construction industry this year but employment turns around and increases slightly next year when investments in non-residentials and civil engineering increases.

Per cent variation of investment in real terms of previous year


Number of building permits in residential construction