Finnish construction rebounds

A surge in data centre construction is pulling Finland’s building industry out of a prolonged slump. Rakli expects the sector to grow by 2–3 percent this year, led by commercial and industrial projects while housing starts remain well below historical levels.

Finland’s construction sector is growing for the first time in several years, and data centres are leading the way. Industry body Rakli forecasts growth of 2–3 percent this year, but housing construction remains the sector’s main weak spot.

Building permits for data centres have risen sharply since 2024, and Rakli expects the trend to continue. Together with the services sector, data centres are now the primary driver of growth across the Finnish construction industry. Sector confidence passed the eurozone average in July.

“Stronger economic growth is finally supporting construction. We expect the sector to grow by 2–3 percent this year, driven by commercial and industrial building tied to data centres and services. Civil engineering is also getting a boost from defence investments and data centre infrastructure,” says Julia Ruotsi, chief economist at Rakli.

The rapid expansion has prompted calls for national regulation. Rakli wants Finland to establish a framework for governing where and how data centres are built.

“There is currently no adequate national steering system. Finland should designate a body with the authority to determine which data centre projects should be prioritised and where they should be located,” says Ruotsi.

Housing is moving in the opposite direction. Building permits and housing starts in the first half of the year remained well below last year’s already low levels. One positive sign: the supply of both owner-occupied and rental housing has fallen noticeably, particularly in the Helsinki region, which Rakli says could pave the way for new projects.

If the positive trend holds through the rest of the year, Rakli forecasts GDP growth of up to 2.0 percent for Finland in 2026, the fastest pace since 2021.