Construction in Sweden - Key Trends and Opportunities to 2023

Construction in Sweden - Key Trends and Opportunities to 2023

Summary

GlobalData’s Construction in Sweden - Key Trends and Opportunities to 2023 report provides detailed market analysis, information and insights into the Swedish construction industry, including:
- The Swedish construction industry's growth prospects by market, project type and construction activity
- Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in the Swedish construction industry
- Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.

Sweden’s construction industry registered a growth of 4.4% in real terms in 2018, following an average annual growth of 4% during the preceding four years. This growth can be attributed to positive developments in economic conditions, improvement in investor confidence, and public and private sector investments in infrastructure, energy and housing construction projects.

The industry’s output is expected to contract during the early part of the forecast period (2019-2023), however, due to a decrease in domestic demand and private consumption, a weak housing sector and a decline in private sector investments in the country. Weakness in the Swedish krona (SEK) and overall slow economic growth is also expected to hamper the industry’s growth. In real terms, the industry is expected to contract by 2.5% in 2019, 1.3% in 2020 and 0.1% in 2021. Over the remaining part of the forecast period, however, the industry is expected to recover, mainly due to the government’s investment in transport infrastructure. Under the National Transport Plan (NTP), the government aims to invest SEK712.5 billion (US$78.9 billion) during the period 2018-2029 to develop the country’s transport infrastructure. Investments under the National Broadband Strategy 2025 and renewable energy infrastructure are also expected to support the industry’s output.

The industry’s output value in real terms is expected to post a compound annual growth rate (CAGR) of 0.03% over the forecast period.

Key Highlights

- GlobalData expects the energy and utilities construction market to register a forecast-period CAGR of 6.02% in nominal terms, driven by government investments in renewable energy production. The government aims to generate 100% of the country’s total energy requirement through renewable sources by 2040. Consequently, the energy sector is expected to attract more public and private sector investments in order to meet the 2040 target.
- In June 2018, the government unveiled the National Transport Plan (NTP) 2018-2029, with an aim to provide a reliable, robust and modern transport infrastructure. Under this program, the government plans to invest a total of SEK712.5 billion (US$78.9 billion) to develop rail, road, port and airport infrastructure across the country by 2029. In terms of segmentation, the government plans to invest SEK125 billion (US$13.8 billion) to upkeep the railway infrastructure, SEK164 billion (US$18.2 billion) for the maintenance of roadways and SEK333.5 billion (US$36.9 billion) for the development projects of overall transport infrastructure (which also includes rail and road).
- GlobalData expects the institutional construction market to record a forecast-period CAGR of 3.60% in nominal terms in 2023, driven by the government efforts to build educational and healthcare infrastructure in the country, with an aim to provide quality medical and education facilities to every citizen. In the 2019 budget, the government allocated SEK78.1 billion (US$8.4 billion) for the healthcare sector - an increase of SEK426 million (US$45.9 million) compared to the previous year’s budget. The government also increased the budget allocation for the education sector by 4.3%, going from SEK78 billion (US$8.6 billion) in 2018 to SEK81.3 billion (US$9 billion) in 2019.
- Residential construction market’s forecast-period growth will be driven by the government’s efforts to build affordable housing in the country. According to estimates by the National Board of Housing Building and Planning, 441,000 social housing units are required to be constructed by 2025, in order to address the demand from low- and medium-income families. In June 2018, the government allocated SEK4.0 billion (US$443.1 million) to support municipalities and regions to build 193,190 affordable dwelling units by 2029.
- The total construction project pipeline in Sweden - as tracked by GlobalData, and including all mega projects with a value above US$25 million - stands at SEK1.1 trillion (US$124.6 billion). The pipeline, which includes all projects from pre-planning to execution, is skewed towards early-stage development projects, with 55.6% of the project pipeline by value in the pre-planning and planning stages as of July 2019.

Scope

This report provides a comprehensive analysis of the construction industry in Sweden. It provides -
- Historical (2014-2018) and forecast (2019-2023) valuations of the construction industry in Sweden, featuring details of key growth drivers.
- Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
- Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
- Listings of major projects, in addition to details of leading contractors and consultants

Reasons to buy

- Identify and evaluate market opportunities using GlobalData's standardized valuation and forecasting methodologies.
- Assess market growth potential at a micro-level with over 600 time-series data forecasts.
- Understand the latest industry and market trends.
- Formulate and validate strategy using GlobalData's critical and actionable insight.
- Assess business risks, including cost, regulatory and competitive pressures.
- Evaluate competitive risk and success factors.