Overall construction activity
Global growth is being constrained by geopolitical instability, energy price shocks, trade barriers, and concerns about stagflation. However, the Swedish economy continues to recover, albeit at a somewhat more moderate pace. Construction investment is expected to rebound this year as the residential sector has ceased to weigh on growth. In the coming year, construction investment will continue to expand at a rate exceeding that of the overall economy. This is driven by a sustained upswing in the housebuilding segment, a recovery in commercial real estate construction, and increased civil engineering investment, particularly in the water and wastewater sector and rail-based infrastructure.
Overall, construction investment is projected to increase by just over 8 percent across the forecast period, with broad-based growth as all sub-sectors contribute positively. The upturn in investment brings an end to the decline in employment, which instead turns upward and grows modestly both this year and next. In total, employment is expected to rise by 2.7 percent, or by nearly 10,000 persons, between 2025 and 2027.
Housebuilding
Housing construction, which rebounded last year after bottoming out at just over 27,000 housing starts in 2024, is set to increase further this year and next, reaching just under 36,000 housing starts by 2027. Rising house prices, low variable interest rates, increasing real disposable incomes, and eased credit constraints are contributing to higher residential construction output over the forecast period. Overall, new construction investment is expected to increase by 20 percent this year and by 11 percent next year.
Rebuilding investment will remain unchanged this year as last year’s pronounced ROT-driven (Repair and Maintenance deduction) effect reverses. However, next year, increased spending by real estate companies is expected to support positive growth in this segment.
Non-residential construction
Non-residential building investment, which declined by 3 percent last year, is set to recover and grow throughout the forecast period. This year, the upturn is primarily driven by government spending on defense and correctional services. Next year, growth is mainly supported by commercial real estate companies as well as manufacturing industry investments (such as factories for green steel and transformers etc.), in mainly the counties of Norrbotten and Dalarna.
GDP 2025
BILLION
POPULATION 2025
Total investment in construction in 2025
BILLION
Civil engineering
Civil engineering investment, which remained unchanged last year, is expected to accelerate and grow over the forecast period. On the private side, this is driven by the energy sector and the water, wastewater, and recycling segment. On the public side, the expansion is primarily driven by increased investment in rail infrastructure, while road investments provide a positive contribution only in the short term (in 2026).
Prices of construction materials
The prices of construction materials follow those on the global market. Last year it was cement and wood who saw the largest price increases due to higher prices for energy, transport and other input goods as well as costs for green transition.
Business registration and bankruptcy
The long downturn in Swedish construction industry led to a sharp increase in bankruptcies during 2023-2024. In Sweden you have to go back to the early 90’s to see that high level of bankruptcies in the construction sector. Another consequence of the crisis was that the number of new business registration fell significantly in the sector.
Construction Activity
Number of building permits in residential construction
