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The Swedish building and construction market

The Swedish building market has a turnover of approximately SEK 700 billion, of which the construction market has a turnover of approximately SEK 160 billion.

The Swedish Transport Administration buys for approximately SEK 52 billion, which accounts for approximately 30 per cent of the construction market's turnover.

Size of the market

According to Byggföretagen, the total building investments have a turnover of approximately SEK 550 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, construction investments in Sweden have had a turnover of approximately SEK 100 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 40 to 50 billion per year. In total therefore, the construction market turns over approximately SEK 140–160 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 construction investments, as total construction investments make up such a large part of the Swedish building market.

After a strong end to 2021 and the beginning of 2022, the economy in construction has been dampened partly by the consequences that the outbreak of war in Ukraine creates with, for example, rising energy and raw material prices, higher material prices and higher interest rates, but also by the coming cement shortage in Sweden.

The increase for total building investments has so far been strong, but is now reversing and will decrease by a total of 11 percent during the forecast period 2022-23. Construction investment decreased by 18 per cent in 2021. It was a broad and sharp decline, with private investment decreased by just over 21 per cent and public investment by 14 per cent. Construction investment is expected to decrease by 5 percent in 2022. When the cement shortage hits full force in 2023, the decline in both private and public construction investment will decrease 15 percent (construction investment -18 percent and private construction investment -11 percent).

During the first half of 2022, the Swedish Government will decide on a new long-term infrastructure plan for the state's transport infrastructure for the period 2022-2033. The plan comprises SEK 799 billion, of which SEK 165 billion will be used to maintain state railways and SEK 197 billion will be used to maintain state roads. This means an increase of SEK 40 billion and SEK 33 billion, respectively, compared with the current plan for 2018–2029. The financial framework for developing the transport system is SEK 437 billion, which is an increase of just over SEK 100 billion compared with the current plan for 2018–2029.

Investment index Roads and Railways

In 2020–2021, the Swedish Transport Administration's investment index for railways increased by 4.2 per cent and the road investment index increased by 14.8 per cent.The consumer price index with constant tax (KPI-KS) increased by 2.1 per cent during this period. The road investment index increased, largely due to a sharp increase in the price of oil (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 indices (and formerly E84). If the infrastructure index 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.