Veidekke (VEI) Spring Market Update 2025 Presentation summary

Market overview and economic environment

• Scandinavian contracting markets saw an 11% decline in 2024 and a further 4% drop in 2025, but are expected to recover by 9% in 2026, with Sweden leading the upturn, especially in apartments and small houses.

• Economic growth is forecast to accelerate in Norway and Sweden in 2025–2026, while Denmark's growth is expected to slow due to reduced public investment.

• Household purchasing power is improving, unemployment remains stable, and real wage growth is expected to rise as inflation falls and interest rates decrease, particularly in Sweden.

• Key policy rates are being cut, but market rates remain high; inflation is close to the 2% target across Scandinavia.

• Population growth is slowing in Norway and Sweden, impacting long-term demand for residential and educational buildings, but increasing demand for elderly care facilities.

Contracting market trends and sector performance

• Order intake for construction projects declined in Norway (apartments and small houses down 22%) but rose 19% in Sweden in 2024, driven by activity in Greater Stockholm and Gothenburg.

• Commercial building order intake fell 5% in Norway and 15% in Sweden, with the decline most pronounced in industrial and warehouse segments, though overall levels remain robust.

• Public building starts increased 27% in Norway (mainly hospitals) and 5% in Sweden (mainly care facilities), while school construction is shrinking due to demographic trends and municipal budget constraints.

• Denmark saw a sharp drop in commercial (-29%) and public building (-35%) starts in 2024, with moderate investment expected in 2025–2026 as defence spending is prioritized.

• Employment in construction and engineering has remained relatively stable, with only a modest decline in Norway and a more notable drop in Sweden.

Infrastructure and civil engineering outlook

• Civil engineering markets in Norway and Sweden are set for broad-based growth in 2025–2026, with annual growth rates of 3% and 7% respectively, driven by roads, energy, water, and rail projects.

• Major transport infrastructure projects continue, with Norway experiencing high order intake in recent years and Sweden expecting a strong increase, especially in railways.

• Road maintenance is a growing priority in Norway, with municipal, county, and national budgets supporting steady market expansion and aggressive railway investment.

• Defence-related infrastructure investment in Norway is expected to have a broad impact on the civil engineering sector, including hangars, logistics, and maintenance facilities.