The RAKSU group
Strong residential construction maintains growth, some decrease expected next year
In a report published on 27 March 2018 the working group on business cycles in the construction sector (RAKSU group) estimates that this year the construction output will grow by 2 to 4 per cent, while in the following year it will decrease by up to 2 per cent. The forecast for the construction of new dwellings is 42,000 to 44,000. Next year the number of building projects concerning new dwellings will decrease by thousands.
A lot of residential building is expected this year, while other construction activities will be decreasing. The outlook for the next few years is still quite good as numerous major construction projects are being planned, especially in the forest industry.
The growth in renovation building, supported by the cyclic trend, is expected to speed up to about 2 per cent. Instead, the growth of land and water construction is forecast to slow down to 1 to 2 per cent. Major infrastructure projects in the Helsinki region include the second phase of the West Metro and the Raide-Jokeri light rail link, where the building is to get started next year.
In growth centres almost all of the construction capacity is in use. There are some signs of a downturn in construction, but this has not started yet. Residential investors are expected to become increasingly cautious, which is already reflected as decreasing investments. The strong faith in the future among the consumers implies an opposite trend. Despite the cyclical conditions, construction by the Housing Finance and Development Centre of Finland (ARA) should be about the same as last year. In the 2018 Budget funding was allocated for the construction of about 9,000 rental dwellings by the Housing Finance and Development Centre of Finland (ARA) and for about 2,000 dwellings to be built by means of state-guaranteed loans.
Inflation has stayed moderate, but the prices for construction contracts have risen. Employment in the construction sector increased by almost 20,000 from 2015 to 2018 and unemployment in the sector has fallen below the overall unemployment rate. The need for labour is still expected to grow.
Building 2018–2019, spring (in Finnish)
Sari Sontag, Ministerial Adviser, tel. +358 2955 30181, sari.sontag(at)vm.fi