Www.bygg.org The Swedish Construction Sector. The Construction Sector Today Total market size - ca...

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The Swedish Construction SectorThe Swedish Construction Sector


The Construction Sector TodayThe Construction Sector Today

• Total market size - ca 325 bn SEK – 10 per cent of GDP.

• Investments ca 225 mdr – ca 8 per cent of GDP.

• Over 450 000 employed in the construction /housing sector in total - of which 250 000 employed in ”pure construction”.

• 60 000 companies in the construction sector - 10 000 with employees.


The Construction Sector TodayThe Construction Sector Today

• A severe recession / depression 1990 – 1993

• A rapid recovery during the last years

• A ”boom market” 2006 - 2007

• Low construction investments relative to EU -average

• Dominated by a small number of large companies, but it is the SME´s that are growing

• Internationally reknown and relatively efficient


No of employees

Källa: SCB

0 10 000 20 000 30 000 40 000 50 000 60 000

1-4

5-9

10-19

20-49

50-99

100-199

200-499

> 500

Number of EmployeesNumber of Employees in construction companies 2000in construction companies 2000


Construction investment Construction investment % of GDP% of GDP

0

2

4

6

8

10

12

1985 90 95 00 05


Källa: SCB, BI

Construction investmentsConstruction investments

Mdkr

Sector 2006

Residential Construction 91,4

Other housing 72,1

Infra structure 62,3

Total Construction Investments

225,9


Construction as percentage of GDP, 2004

0,00

2,00

4,006,00

8,00

10,00

12,00

14,00

16,00

18,00

20,00


No of apartments started 1950-2006No of apartments started 1950-2006

0

10 000

20 000

30 000

40 000

50 000

60 000

70 000

80 000

90 000

100 000

110 000

120 000

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

Källa: SCB, BI


Regional construction investments in 2005Regional construction investments in 2005SEK mnSEK mn

61012601340141016001720185018601910193022002400250027402770282029603000

34003550388040704210

898010200

26790

0 5000 10000 15000 20000 25000 30000

Gotlands länSjuhärad

KristianstadBlekinge län

Örebro länVästmanlands län

Jämtlands länGävleborgs län

Kalmar länSkaraborg

Dalarnas länKronobergs län

Södermanlands länVärmlands län

FyrbodalVästerbottens län

Norrbottens länÖstergötlands län

Hallands länVästernorrlands

Uppsala länJönköpings län

HelsingborgGöteborg

MalmöStockholms län

Källa: BI


””Hot” topicsHot” topics

• General perception and knowledge of the sector

• Uncertain playing field

• Labour costs

• Internatialisation

• Industrialisation

• Shortage of labour 10 years ahead?


In the general debate the picture is…In the general debate the picture is…

• Construction investments in Sweden are high

• Housing standards are high – houses are modern

• Constructions costs have risen extremely fast

• The Swedish construction sector is ineffecient and expensive

• But the truth is quite different


In reality….In reality….

• Construction costs in Sweden are relatively low – but housing costs/living costs are high

• Existing cost statistics are unreliable

• … but the most rapidly rising costs are land prices and local fees

• Productivity growth in Sweden relatively good in an international comparison. Productivity levels high in Sweden.

• Construction investments in Sweden are low..

• The housing ”vintage” is relatively old…


Housing stock by ”vintage” within EUHousing stock by ”vintage” within EU

0%

20%

40%

60%

80%

100%

Irlan

d

Fin

land

Luxe

mbu

rg

Ned

erlä

nder

na

Öst

errik

e

EU

-sni

tt

Spa

nien

Gre

klan

d

Dan

mar

k

Sto

rbrit

anni

en

Sve

rige

Tys

klan

d

Bel

gien

<1919 1919-45 1946-70 1971-80 >1980


0 500 1000 1500 2000 2500 3000

Greece

Sweden

Netherlands

Germany

France

Spain

EU-avg

Ireland

Finland

Italy

Denmark

UK

EUR/sqm

Construction costs (high quality)for apartment houses in EU 2001

Källa: Gardiner & Theobald


Housing costs as % of total consumptioncosts in EU 2004

0 5 10 15 20 25 30

Irland

Grekland

Storbritannien

Italien

Österrike

EU-snitt

Portugal

Frankrike

Finland

Belgien

Nederländerna

Luxemburg

Danmark

Spanien

Sverige

Källa: European Housing Statistics


Productivity in the Construction Sector

0

20

40

60

80

100

120

US

A =

Inde

x 10

0


Sustainable constructionSustainable construction

• Cooperation within ”Byggsektorns kretsloppsråd”

• BASTA – A EU-life co sponsored projekt

• Own projects – chemicals, energy, waste

• Include environment/sustainability in ”everything”


The Ecocycle Council

Unique form of Cooperation

The Ecocycle Council is an association of around 30 organizations within the Swedish building and real estate sector. The aim of the organization is “that the building sector, through voluntary efforts, on market grounds and in close co-operation with authorities and legislation, succeeds in conducting credible, effective, co-ordinated and systematic environmental work that results in permanent environmental improvements”.


The Constructions Sector faces tougher international competition and a rapid restructuring process?

Will we succeed?


Foreign companies on the Swedish Foreign companies on the Swedish construction marketconstruction market

Igår : En skyddad sektor Yesterday: A sheltered sector


Tougher competetionTougher competetion……

• Tougher competetion on the household market (primarily in the major cities) – Swedish ”blacks” are losing ground

• Tougher competetion on large infra structure projects

• Tougher competetion for UE:s

• All other subsectors will follow…


What have other sectors done?What have other sectors done?

• Increasing imports – lower costs

• Restructure the supplier system

• Focus on core activities

• Focus on the customer

• Partnership with suppliers and customers

• Make use of foreign R&D

• DO not compete with low prices, but with qulaity, innovations and customer satisfaction

• Protect and take care of your brand name

• Improve productivity


Why should the Swedish construction Why should the Swedish construction sector succeed?sector succeed?

• Efficient and low costs

• Good recruitment – popular to choose a construction education

• Top level in health and safety

• Gone through more of restructuring than most other old EU-countries

• Rapidly growing markets very close by (Poland, Russia and the Baltics)

• No big excess labour supply anywhere


To ConcludeTo Conclude

• Good Market Prospects in the coming Years

• A rapid restructuring of the Swedish business sector and tougher environmental standards improves and affects construction market prospects

• Repair and Maintenance a growing Subsector

• Tougher Competition and Restructuring

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