Construction Trends in Sweden

Every month, we provide our clients with an up to date comment on the market development for the building market as a whole, and for various segments of the market. Open the pdf-file to see a short version of this monthly comment.

Due to a strong development for new residential buildings in the fourth quarter of last year, the total investments managed to stay just above the investment output in 2002. The annual trend for December amounts to 127.8 Bill. SEK. As previously assumed in 2003, new non-residential buildings end up at a slightly lower output compared to 2002, while the R&M sector experience a vague, yet positive, development. By annual trend, we mean the accumulated development for the last 12 months compared to the same period a year earlier.

During the fourth quarter of 2003 just over 6,000 dwellings were started. This was an increase of 26% compared to the same quarter in 2002. This means that approx. 23,000 dwellings were started in 2003 as a whole, which is 19% more than in 2002. Building permits for residential buildings have also had an increase during the later part of 2002. It is mainly flats that are increasing. One important reason for this is the "stimuli-package" for cheaper flats which was introduced in August. So far, 80 applications with a total of 3,068 flats have been approved within this framework. During December, 1,422 dwellings were started in Sweden, and that is actually a decrease of 8% compared to December 2002. On an annual basis, only a few regions are showing negative starting trends for dwelling. Among these are however the Stockholm Region (-9%). For the R&M sector for residential buildings, 2003 seems to become a rather stable year compared to 2002. This after several years of strong growth within the DIY-market.

The negative trend remains for new non-residential buildings. In December, building permits decreased by as much as 30% compared to the same month a year earlier. The decrease amounts to almost 65,000 m2! The annual trend show a continued negative development. It is now down by 16% compared to 2002. However, if we look at the decrease in building starts for non-residential buildings, it is not as bad. By December, the activity on an annual basis is down by 2%. The larger city areas, where a large part of the investments in new non-residential take place, continue to perform poor. The building permits in the Stockholm area has halved during the last year! Thus - Sweden remains at the bottom of Europe regarding the new non-residential sector. Also, there are almost no signs that give hope for an increase in 2004. Within the R&M sector, there is a great accumulated need of maintenance, especially within the public sector, but poor finances prevent these investments to take place. There are however some signs of a somewhat improved activity by the end of 2003, which should remain in 2004. This is mainly concerning adaptations/re-modelling for new tenants.

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