The RAKSU group:
Modest slow-down in construction growth rate
The RAKSU group, which studies trends in construction, has published its assessment of construction for 2017–2018. Growth in construction is slowing down from last year’s brisk pace. RAKSU expects total construction output to grow by 1-3% in 2017.
Last year, a start was made on the construction more than 37,000 housing units. Construction also drove significant growth of employment in the economy as a whole last year.
The trend in building permits granted continued to be very strong in the latter part of 2016. Permits for apartment buildings in particular have grown. The early part of 2017 appears to be good, but the behaviour of residential investors creates uncertainty in the forecast. This year, significantly more new, non-subsidised rental apartments will be completed than last year. Possible changes in investors’ decisions may result in a rapid decline in apartment building starts, and therefore large fluctuations are possible.
In 2018, the rate of growth is expected to be slow or even to begin decline, and to be in the range -1 - +2 %. The RAKSU group’s forecast for housing starts this year is 32,000 – 34,000 units. Next year, it is projected that there will be a few thousand fewer housing starts than the current year. Construction of other buildings will decline from last year as large industrial construction investments are completed.
Civil engineering construction is expected to slow this year to 1-2%. Next year, industrial construction in particular may pick up once again with the possible start-up of planned major softwood pulp mill and nuclear power plant projects, for example. Renovation construction is forecast to grow by 1-2% this year and next.
Regionally, construction will be strongly focused on the Helsinki Metropolitan Area and Tampere, but is also expected to develop quite positively in other university locations.
The number of people employed in the construction industry is expected to grow to some extent compared with last year. As growth will be geographically uneven, regional labour shortages may arise.
Sari Sontag, tel. +358 2955 30181, sari.sontag(at)vm.fi