At the start of a new decade, the Scandinavian building construction market
looks more stable than for many years. Veidekke expects steady, relatively high
activity in Scandinavia in 2020.
For the time being, the highly cyclical housing market appears to be past the
largest fluctuations.
"Most major metropolitan areas are experiencing moderate price growth and a high
number of transactions in the secondhand housing market. However, the number of
new home sales is also rising steadily, and national statistics bureaus are
reporting a tapering off of construction costs," says Veidekke Director of
Analysis Kristoffer Eide Hoen.
A couple of years ago, the number of construction starts for residential
projects launched in and around Stockholm and Oslo was very high. The number is
now far smaller, helping to stabilise - and in some areas reducing - the supply
of unsold new-build apartments.
"Against this backdrop, 2020 should bring moderate growth in the number of
residential new-builds in Oslo and Stockholm, and generally stable residential
construction activity elsewhere in Scandinavia," says Hoen.
As regards the building construction market otherwise, Hoen points out two
particular segments worth monitoring as 2020 approaches:
"Growth in both the railways market and the market for health care-related
buildings is being fuelled by clear ambitions and public financing, and activity
levels are set to rise substantially in these segments. Although demand for
industrial and logistics buildings is also boosting construction activity, we
expect that generally weaker economic conditions may dampen further growth in
this segment after 2020."
"The underlying market drivers are generally strong and are further supported by
the interest rate outlook," says Kristoffer Eide Hoen. "In our view, weak
international economic conditions represent the greatest risk. We have
previously seen that these may impact investment appetite among businesses and
purchaser confidence in the housing market. However, based on our current
insights, we take a positive view of the building construction market outlook
for the next few years."
Veidekke's complete analysis of the Scandinavian construction and civil
engineering market is available on veidekke.com.
For more information, please contact:
Kristoffer Eide Hoen, Director of Analysis, Veidekke ASA, +47 976 75 434,
Kristoffer.Eide.Hoen@veidekke.no
Veidekke's press images (https://veidekke.fotoware.cloud/fotoweb/archives/5028
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Veidekke is one of Scandinavia's largest construction and property development
companies. The company undertakes all types of building construction and civil
engineering contracts, develops residential projects, maintains roads, and
produces asphalt and aggregates. The company is known for its involvement and
local knowledge. Its annual turnover is approximately NOK 36 billion, and half
of its 8,600 employees own shares in the company. Veidekke is listed on the Oslo
Stock Exchange and has always posted a profit since it was founded in 1936.