VTT Technical Research Centre of Finland
Erkki Lehtinen

Mail: Erkki.Lehtinen@vtt.fi
Web: www.itic.pt

The Finnish economy is growing faster than the European average. The figure for 2005 will be about two percent due, for instance, to the industrial action in the paper industry last spring. Quite good growth of around 3.5 percent is forecast for 2006 due to the lower than normal growth in 2005. In 2007-2008 growth is expected to continue at just under 3 percent.

In 2005 the residential construction volume continued to grow quite briskly for the third year in a row. In 2003-2005 new construction increased an average of about 10 percent annually. It will slow down clearly in 2006 to about 3 percent. In 2007 and 2008 the volume is expected to contract somewhat. The number of housing completions was about 32,000 in 2005. It means 6 dwellings per 1000 inhabitants, while in whole Euroconstruct area it was about 5. Demographics indicate clear need for new dwellings. Low interest rates, the ease of getting a loan and longer than earlier loan periods allow demand to increase even beyond calculated needs.

The trend-like growth in renovation of residential buildings continues. An increasing share of the young housing stock is reaching the age when repairs are a must, and the modernisation of dwellings also increases the need of rehabilitation.

Non-residential construction has fared less well in recent years. Renovation has increased slightly, but new construction has trended down. Thanks to brisk new construction, the total non-residential volume increased nearly 5 percent in 2005. Growth will continue into 2006 but at a slower rate. In 2007 and 2008 also new non-residential construction is expected to contract slightly.

The volume of civil engineering grew at a rate of about 1 percent in 2005, or as fast as the year before. Large road, rail, energy and port projects maintained investment growth. In 2006 the volume will remain at nearly the 2005 level while maintenance increases slightly. In 2007 and 2008 investment is going to fall.

Countruction Output by Sectors in Finland

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