Relevant markets for Lemminkäinen in Finland and abroad
Source: Lemminkäinen's Interim Financial Review
Markets in Finland
The outlook for construction in the coming years is quite favourable. In 2010 the volume of construction is expected to contract by 2 per cent on 2009, but a return to growth is expected to occur already in 2011. The decrease will be mainly in non-residential building and infrastructure construction, whereas the number of new building starts is expected to be 7 per cent higher than in 2009.
Housing sales have picked up significantly since last year, and housing production is expected to grow markedly this year. The volume of privately financed housing production in particular is growing. Some 27,500 new housing starts will be made in Finland during 2010, which is about a fifth more than in 2009.
Despite the slowdown of the real estate market, the number of new commercial and office building starts is expected to remain at the 2009 level. There are a lot of non-residential building projects in the pipeline, but their start dates have been put back. The number of starts on public service buildings is also expected to remain at the 2009 level, but industrial construction is expected to decline. The construction of logistics centres has remained brisk.
Renovation construction is expected to increase at an annual rate of about 2 per cent over the next two years. The growth and ageing of the building stock as well as its upgrading to modern technical standards are increasing the demand for renovation construction.
The volume of infrastructure construction is expected to decrease by 2 per cent during 2010. New infrastructure projects are expected to start up in the coming years, and consequently the decline of infrastructure construction is expected to stop in 2011.
With the slowdown of new construction, the emphasis in the technical building services sector has shifted to renovation construction, and its demand is expected to continue growing in the coming years. Demand for technical building services is also expected to rise as residential construction picks up.
Markets outside Finland
In the Nordic countries, government stimulus measures have kept the infrastructure markets at good levels. In Norway and Denmark demand for paving works has been brisk, but competition in the industry has intensified. In Sweden significant tunnel projects in the Stockholm area provide work for infrastructure builders.
In the Baltic states the construction market continues to be challenging. However, in spite of the difficult market conditions, infrastructure construction in the Baltic area showed some slight signs of recovery.
In Russia, housing sales picked up markedly towards the end of 2009 and continued to be brisker than last year during the first quarter. The Russian economy is expected to recover at the same rate as the rest of the world. The growth forecast for this year is about 6 per cent, and economic growth is expected to continue in 2011 and 2012.
Updated 6.5.2010