Veidekke (VEI) Autumn Market Update 2025 Presentation summary

Market overview and outlook

• Scandinavian contracting market valued at ~NOK 940 billion in 2024, covering apartments, commercial, public buildings, and civil engineering.

• Market experienced an 11% decline in 2024 and is expected to fall by 4% in 2025, with moderate growth of 5% in 2026 and 4% in 2027.

• Recovery is anticipated from 2026, especially in apartments and small houses, with infrastructure remaining strong.

• Market volumes are back to 2014-2015 levels, well below the 2022-2023 peak.

• About half of the market decline is expected to be recovered by end of 2026.

Economic environment

• Norway's growth is accelerating in 2025, driven by consumption and exports, while Sweden lags but is expected to improve in 2026-2027.

• Household purchasing power is improving, with stable unemployment across Norway, Sweden, and Denmark.

• Inflation is near 2% targets, and key policy rates are being cut, but market rates remain high.

• Population growth is slowing in Norway and Sweden, impacting long-term demand for new schools and housing, but increasing demand for elder care facilities.

• Demographic shifts are driving investment needs toward elder care and away from education.

Contracting market trends by segment

• Order intake for new apartments and small houses rose 21% in Norway and 26% in Sweden in 1H 2025, indicating a positive trend.

• Commercial building order intake was flat in Norway (+4%) and Sweden (+2%) in 1H 2025, with robust activity despite a decline from previous highs.

• Public building starts fell in Norway (mainly due to fewer hospital projects) but rose 19% in Sweden, driven by care-related buildings.

• Denmark saw a 7% drop in commercial and 10% drop in public building demand in 1H 2025, but growth is expected to resume.