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Economic trends in construction

The RAKSU group studies trends in construction led by the Ministry of Finance and assesses the development of economic trends in the construction of residential buildings, infrastructure and renovation. The members of the group include key authorities and members of organisations in the field.

The reports of the RAKSU group discuss the economic status of the field throughout the country, and in some areas, also regionally. The reports study the situation from the point of view of volumes, prices, costs and financing as well as employment and the consumption of construction materials. The RAKSU group investigates structural issues and needs for change related to construction over a long period of time. The group also gives recommendations to ensure balanced development in the field of construction.

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.

 

Raksun logo

 

RAKSU group

 

Chair

Ms Sari Sontag              Ministry of Finance

Members

Mr Tino Aalto

The Finnish Association of Consulting Firms SKOL

Ms Johanna Alatalo

Ministry of Employment and the Economy

Ms Terhi Heikkonen

Confederation of Finnish Industries EK

Mr Matti Holopainen

Association of Finnish Local and Regional Authorities

Mr Ari Huomo

Finnish Transport Agency

Mr Kimmo Huovinen

The Housing Finance and Development Centre of Finland ARA

Mr Heikki Jämsä

INFRA

Mr Jukka Kero

The Finnish Real Estate Federation FREF

Mr Harri Kähkönen

Ministry of Finance

Mr Tommi Laanti

Ministry of the Environment

Ms Armi Liinamaa

Ministry of Finance

Mr Eero Nippala

Tampere University of Applied Sciences TAMK

Ms Paula Paavilainen

Statistics Finland

Mr Pekka Pajakkala

Forecon Ltd

Mr Sami Pakarinen

Confederation of Finnish Construction Industries RT

Mr Jouni Parkkonen

Association for Advocating Affordable Rental Housing KOVA

Mr Mikko Somersalmi

The Finnish Accociation of Building Owners and Construction Client RAKLI

Ms Hanna Perälä

Ministry of Transport and Communications

Mr Mark Rantala

Ministry of Finance

Ms Elina Selinheimo

Ministry of Finance

Mr Hannu Viertola

Bank of Finland

 

 

 

 

 

 

 

Contact information

Ms Sari Sontag, Ministerial Adviser
Ministry of Finance, Economics Department, Macro Forecasting
+358 2955 30181
sari.sontag@vm.fi