Relevant markets for Lemminkäinen in Finland and abroad
Source: Lemminkäinen's Financial Statements Bulletin on 12.2.2010
Operations in Finland
Demand for construction declined strongly in 2009, the contraction being most clearly evidenced in the number of new building starts, especially in the first half of the year.
In Finland the emphasis in residential construction shifted, especially during the first half of the year, towards rental housing production, and new starts were made on some 14,000 state-subsidised rental housing units. Sales of dwellings in own housing developments picked up markedly from the level at the end of previous year, and the volume of own housing production started to grow cautiously towards the end of the year. Approximately 24,000 new housing starts were made in Finland during 2009, and that number is expected to be slightly higher in 2010.
In non-residential building construction, demand for commercial and logistics buildings remained at a reasonable level, but there was a marked decline in the construction of office and industrial buildings during 2009. Finnish real estate investors continued to invest in properties around the country, and the real estate investment market show signs of recovery. Real estate developments by public-sector organisations also had a positive impact on the non-residential construction market.
The volume of infrastructure construction fell from the good level of 2008, but it did not decline in the same way as the volume of other construction. The main reason for the contraction in infrastructure construction in Finland was the completion of several major infra projects at the end of 2008 and the beginning of 2009. The volume of municipal infrastructure construction remained at a reasonable level. The contraction in building construction was reflected especially in reduced demand for geotechnical engineering work, mineral aggregates and ready-mix concrete.
With the slowing in new construction, the emphasis in the technical building services sector has switched to renovation construction, due in part to the grants and incentives offered by the government. The volume of renovation construction rose slightly during 2009 and is expected to continue growing in the coming years. Demand for servicing and maintenance of technical building systems remained stable.
Operations abroad
In Scandinavia, government stimulus measures aimed at major projects and basic road-keeping helped to support the infrastructure markets at good levels. In Norway and Denmark demand for paving works was especially brisk. In Sweden the development of the rail network continued, which offered some significant contracts to geotechnical and rock engineering contractors.
In the Baltic states the construction market remained extremely challenging. A few EU-funded road projects helped to support the Baltic infrastructure markets.
In Russia economic uncertainty continued and there was a marked decline in demand for construction from the level of the previous year. However, housing sales in Russia did pick up markedly towards the end of the year and they are expected to remain steady in 2010 as well.
Updated 12.2.2010