Veidekke: expects lower production in construction markets

Veidekke anticipates a 13% drop in production in the Scandinavian construction markets by the end of 2024, while positive developments include high infrastructure-related activity and cost stabilisation.

Although construction-cost inflation appears to be slowing and development trends are expected to normalise going forward, prices are currently expected to remain at their present high levels.

Veidekke’s market update assumes production in the Scandinavian construction markets to drop 6% in 2023, and 7% in 2024. The three countries are at somewhat different cyclical stages. While Denmark’s economic downturn started last year and the Swedish market followed this year, the market in Norway has maintained high production into Q3 2023 thanks to the number of construction starts remaining high until year-end 2022. However, 2024 will see the downturn spread to Norway as well.

Key drivers such as long market rates, the labour market and demographic trends indicate that the market downturn will bottom out by the end of 2024, although forecast visibility for 2025 remains limited. If interest rates develop more favourably than suggested by current market rates, the 2025 forecasts may be adjusted to indicate further growth.

“Rising interest rates are impacting all sectors other than central government, and the effects are now becoming apparent in Norway as well,” says Kristoffer Eide Hoen, Head of Business Development and Analysis, Veidekke ASA.

“The construction industry – and residential construction in particular – is being hit the hardest. Although new residential sales have been very low for the past year, the number of construction starts only started to decline after Christmas, meaning that the drop in production will only start to bite from year-end 2023. The commercial and public buildings segments have both been somewhat more resilient, but interest rate rises are also being felt there, with a resulting decline in activity levels,” says Hoen.

The infrastructure sector is a positive exception in all three countries, not least thanks to high central government investment. Large transport infrastructure projects are projected to remain a strong segment for several years, and to be supplemented by a boost in road maintenance as well as increased investment in water supply, sewerage and energy projects. Anticipated prioritisation of defence spending is expected to intensify competition for budget funds in the next few years, particularly in Sweden and Denmark.

Following many years of strong economic performance, the Scandinavian construction markets look set to experience a potentially challenging economic downturn. The resulting anticipated rise in construction-industry unemployment indicates vacant capacity and a general slowdown in all three countries.

For more information, please contact:
Kristoffer Eide Hoen, Head of Business Development and Analysis, Veidekke ASA, +47 976 75 434,

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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 39 billion, and half of its 8,000 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.

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Presentation market update autumn 2023 pdf