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All the evidence indicates that construction will remain fairly unchanged over the next five years. According to the Swedish Construction Federation (Sveriges Byggindustrier, BI), the industry and employer organisation for Swedish companies in the sector, total construction investments would increase by one to two per cent growth in 2006.
This means annual construction investments will be in the range of 165 to 170 billion crowns (about Dh82 to Dh85 billion).
Overall construction investments are allocated approximately as follows by subsector: Miscellaneous private and public buildings, 31 per cent; housing, 32 per cent; public and private civil construction, 30 per cent; and industrial construction, seven per cent.
The residential market Swedish residential construction was expected to continue expanding over the next few years.
The largest residential builders in Sweden are the listed companies JM, Skanska and NCC and, to a lesser extent, Peab, plus the cooperatively owned companies HSB and Riksbyggen.
In major cities there are also small local companies that carry out their own project development and sell homes. Generally speaking, residential construction is limited to major cities and other growth centres in Sweden.
Aside from a small percentage of rental units in student residences and senior housing developments, virtually everything being built today is single-family homes for purchase or cooperative tenant-owner units in apartment buildings. Residential builders buy the land and largely construct these housing units themselves.
Major construction companies have their own sales departments and real estate agencies. The builders control the whole process but hire outside planners for design, preconstruction engineering and installation. The companies also work in varying degrees with subcontractors during the actual construction and interior-fitting phase.
In recent years, the trend has been toward relatively well-appointed, luxurious and expensive residential units.
New apartment buildings are often centrally located, preferably near the water.
Renovation investments in Sweden’s housing stock fell sharply in the early 1990s and have not recovered since. Currently, about 20 billion crowns (about Dh10 billion) is invested annually in renovation of housing.
Infrastructure investments
In recent decades the major construction companies have been involved in all types of projects: commercial and residential buildings, industrial facilities, roads, rail systems, harbours, power generating facilities and so on.
For this reason, the line between building construction and civil construction is not considered as sharp as in many other countries, although of course the engineering and occupational skills required for these two segments are not entirely compatible.
The Swedish infrastructure market differs from the rest of the construction market. There are fewer players, both among contractors and clients. Local presence and local knowledge, which are highly important to builders of residential and commercial structures, are not at all as vital.
In principle, all construction in this sector was once provided by public agencies. This is no longer the case. Sweden was relatively early in deregulating its electricity, energy, water, transportation and telecom sectors.
Today most investments in these fields are private. However, pure transportation infrastructure — roads, streets and rail systems — is still overwhelmingly funded by public agencies. The largest clients are the National Rail Administration (railroads), the National Road Administration (highways) and Sweden’s municipalities (municipal streets and parks).
A large proportion of this work is performed by separate construction companies that are owned by these major clients.
The main private contractors in the road and rail fields are Skanska, NCC and Peab. However, there are also several foreign-owned contractors.
Norwegian, Finnish and Danish civil construction companies have established subsidiaries in Sweden. In major infrastructure projects such as the Öresund Fixed Link between Sweden and Denmark and the High Coast Bridge on the north Baltic coast, large European companies have participated both in the tendering process and in the final construction consortiums.
Road and rail investments will increase fairly dramatically. Most forecasts foresee annual growth of around 10 per cent yearly during the next few years.
This material was originally published on Sweden.se — the official gateway to Sweden.
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