Growth in the Scandinavian construction markets is strong and thus far in line
with Veidekke's positive forecasts from last autumn. However, the war in Ukraine
is casting substantial uncertainty over future contracting market developments.
On the back of a record industry order intake at the end of 2021, particularly
in Sweden, activity levels were recovering at the start of 2022.
"Following start-up of many projects last year, Veidekke expects construction
production to be high in 2022. We anticipate growth in the Swedish building
sector and the Norwegian transport infrastructure sector," says Kristoffer Eide
Hoen, Director of Business Development and Analysis at Veidekke ASA.
Recent increases in production values are partially attributable to high
construction cost inflation. However, cost inflation has been compensated for by
increased sale prices in many market segments. For example, both average
construction costs and new-build prices for apartments in Norway increased by
approximately 6% in 2021.
The invasion of Ukraine is putting additional pressure on both European markets
and global commodity prices, exacerbating existing strains on certain supply
chains resulting from the Covid-19 pandemic. Rises in the prices of input
factors already committed or announced as at 30 March indicate a 5% to 10%
increase in construction cost indices from December 2021 to December 2022.
However, given the uncertainty of the current situation, the range of potential
outcomes is broad.
There are indications of somewhat lower demand for new construction projects in
the year ahead, particularly compared to the strong figures recorded in Sweden
and Norway towards the end of 2021. This change is linked to both new
geopolitical uncertainty and expectations of rising interest rates and further
increases in construction costs.
Forecasts as to new-project demand and future price levels are considerably less
certain than usual, and any escalation or de-escalation of the conflict level in
Europe may result in different scenarios than those adopted as the basis for
Veidekke's forecasts.
Veidekke's market report will be presented at 08:30 on Thursday 31 March. The
presentation will be streamed as a webcast on
www.veidekke.com (https://365veidekke.sharepoint.com/sites/KO
-Konjunkturrapport/Shared%20Documents/General/Marked%20og%20analyse/01%20Markeds
o
ppdatering%20(Veidekke.com)/07%20Markedsoppdatering%201.%20kvartal%202021/04%20P
r
essemelding/www.veidekke.com).
For more information, please contact:
Kristoffer Eide Hoen, Director of Business Development and Analysis, Veidekke
ASA, +47 976 75 434, Kristoffer.Eide.Hoen@veidekke.no
Veidekke press photos (https://veidekke.fotoware.cloud/fotoweb/archives/5028
-Pressebilder-Veidekke/)
Subscribe to notices from Veidekke (http://veidekke.com/no/borsmeldinger/abonner
-pa-meldinger/)
Veidekke is one of Scandinavia's largest contractors. In addition to undertaking
all types of building and civil engineering assignments, the group also
maintains roads and produces asphalt and aggregates. Veidekke emphasises
stakeholder involvement and local experience. Its annual turnover is
approximately NOK 38 billion, and half of its 7,800 employees own shares in the
company. Veidekke is listed on the Oslo Stock Exchange, and has posted a profit
every year since its inception in 1936.