The Swedish building and construction market

The Swedish building and construction market has a turnover of approximately SEK 750 billion, of which the civil engineering market has a turnover of approximately SEK 200 billion.

The Swedish Transport Administration buys for approximately SEK 61 billion, which accounts for approximately 30 per cent of the civil engineering market's turnover.

Size of the market

According to Byggföretagen, the total building investments have a turnover of approximately SEK 600 billion. Total building investments consist of the building of new and the conversion of existing housing and premises, as well as investments in civil engineering construction.

In recent years, civil engineering investments in Sweden have had a turnover of approximately SEK 150 billion per year (according to Byggföretagen). Included in the construction sector – apart from roads, streets and railways – are power stations and district heating plants, water and wastewater treatment plants, structural engineering activities linked to transportation, and post and telecommunications. In the construction market, large resources are used to maintain and repair facilities. However, the exact amount used for maintenance and repairs is difficult to measure. An approximate estimate suggests that this is SEK 55 to 70 billion per year. In total therefore, the construction market turns over approximately SEK 200 billion per year.

Economy and price development for building investments in Sweden

The economic situation for total building investments (housing, premises and facilities) has a major impact on the price development of civil engineering investments, as total construction investments make up such a large part of the Swedish building market.

After a number of years of rising construction investments, the economy in construction has rapidly changed through a change in economic conditions.

High inflation with increasing costs, sharply increased interest rates and a subdued global economy reduces demand in the construction sector. The economic downturn began in 2023 and the Swedish economy is in a recession that deepens in 2024. The rise in total construction investment has been strong for many years, but is now cooling down and is estimated to decrease by a total of 9 percent in 2023 and by 5 percent in 2024

The overall construction market presents a divided picture, partly with a sharp decline in housing construction and at the same time a positive development for premises and civil engineering investments. Civil engineering investments are estimated to increase in total by approximately 8 percent during the forecast period 2023-24, a development where private capital investments are estimated to increase by 16 percent and public capital investments decrease by 3 percent.

Investment index Roads and Railways

In 2022-2023, the Swedish Transport Administration's investment index for railways increased by 7,4 (11,1) per cent and the road investment index increased by 2,7 (18,6) per cent. The consumer price index with constant tax (KPI-KS) increased by 8,4 (8,7) per cent during this period. The path of the investment road index is largely dependent on the development of the oil price (oil and bitumen are a significant part of the cost of building roads).

The Swedish Transport Administration's investment index is the standard index for railway and road projects as well as operational and maintenance measures based on contract. If the infrastructureindex (investment-and operationindex) increases, this means that input goods for the contracts, and thus the implementation itself, will be more expensive. In general, the Swedish Transport Administration is responsible for the suppliers' index-related cost changes, based on the risk allocation determined at the time of signing the contract.