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Veidekke forecasts Scandinavian construction rebound from 2026

20/03/2025, 09:19

Image: Veidekke.

After two years of declining activity, Norway’s largest construction firm Veidekke projects the Scandinavian building market will start recovering in 2026, led by a residential housing upturn and continued strong infrastructure investments.

Dan Görgü

After contracting 11% in 2024 and an estimated 4% drop this year to 885 billion NOK, Veidekke projects a 9% rebound in 2026 to 964 billion NOK. This will be led by a residential housing upturn, especially in Sweden, and continued strong infrastructure investments across the region.

Sweden is expected to spearhead the 2026 recovery with 10% growth, fueled by a 21% surge in housing starts around Stockholm and Gothenburg. Norway will lag slightly with an 8% expansion as interest rates remain elevated.

Infrastructure is a bright spot, with 3% annual growth forecast in Norway from road, energy and water/sewage projects. Sweden will see even faster 7% yearly infrastructure expansion propelled by rail and energy investments.

Construction cost inflation has moderated from over 8% in 2022 to around 4% currently and is projected to remain 1.5-4% annually through 2026 in both countries.

While Ukraine’s reconstruction needs could provide a 20-35 billion USD yearly boost to European construction, the impact on Scandinavia is expected to be limited.

Overall, Veidekke anticipates a gradual but uneven Scandinavian building recovery over 2025-2026 as residential and infrastructure investments regain traction after the recent high inflation period.