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Nordic construction shows tentative recovery in 2025

10/04/2025, 12:00

After several years of decline, the Nordic construction sector is showing cautious signs of a turnaround in 2025, according to new forecasts from industry associations in Finland, Norway and Sweden. However, uncertainties remain.

Dan Görgü

“It’s dawn for the construction sector. Next year, construction investments will grow faster than the overall economy,” says Catharina Elmsäter-Svärd, CEO of Swedish Construction Federation, projecting Swedish construction investments to rise from SEK 645.1 billion in 2024 to SEK 686.4 billion in 2026.

In Finland, the construction sector is expected to grow by 4% in 2025 after an 8% decline in 2024, reports The Confederation of Finnish Construction Industries RT. “However, the investment environment faces exceptionally high uncertainty,” cautions Jouni Vihmo, Chief Economist at RT.

Diverging Subsector Performance

Analysis from Prognosesenteret shows weak residential figures but positive civil engineering prospects across the Nordics. “After three consecutive years of decline, the forecasts finally point to around 3% growth this year,” reports Nejra Macic, Chief Economist at Prognosesenteret.

Public investments are key drivers, with state defense and prison projects boosting Swedish building construction, while railway infrastructure is expected to contribute from 2026. In Norway, the New Aker and New Rikshospital in Oslo are highlighted as positive inputs.

Labor Market and Enablers

Employment effects will lag, with the Swedish Construction Federation projecting just 1,500 new jobs to around 370,000 by 2026, while Finland lost around 30,000 positions during the downturn.

The recovery hinges on assumptions of falling interest rates and stabilized construction costs. If not realized, the upswing could be weaker than anticipated.