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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 49 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 540 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.

The economy in building and construction has slowed down in general in recent years. The trend has been a two-tier building and construction market, where the construction side has been a strong counterweight to the weaker development in building. Total construction investments increased by 5 per cent in 2020 and public construction investments increased by 18 per cent, while private construction investment decreased by 9 per cent.

The trend during the forecast period 2021–2022 is characterised by a recovery of the economy. Restrictions are expected to be lifted and communities can be opened up to operate under more normal conditions. Housebuilding is expected to take off and act as a locomotive for the building industry in 2021–2022. Construction investments will continue to rise by 6 per cent in 2021, largely due to the fact that large ongoing infrastructure projects are in a strong production phase. In 2022, however, construction investments are expected to decrease by 1% due to reduced public investment in infrastructure. Overall, total construction investment is expected to increase by 7 per cent in 2021–2022.

Investment index Roads and Railways

Economic cycle and price developments in 2018: Since 2013, total building investments in Sweden have risen sharply and reached their highest level in 2018. In 2018, the Swedish Transport Administration's investment index for roads increased by 2.9 per cent and the railway investment index increased by 6.2 per cent. The consumer price index with constant tax (KPI-KS) increased by 1.9 per cent.

Economic cycle and price developments in 2019–2020: Total building investments decreased by 2 per cent during the period and showed two trends: a decrease in development in residential construction and premises, and a continued increase in construction investments especially in the public sector.

In 2019–2020, the Swedish Transport Administration's investment index for railways rose by 3.5 per cent and the road investment index decreased by 0.5 per cent in 2019–2020 (+2 per cent in 2019, -2.5 per cent in 2020). The consumer price index with constant tax (KPI-KS) increased by 2.4 per cent during this period. The road investment index declined, largely due to a sharp fall 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.