Tentative growth in 2025 and recovery in Sweden in 2026 11/2025

by Marcel Dresse

Overview of recent developments in building permits in Sweden, based on the latest update of our Global Building Monitor
by Marcel Dresse | B+L

Welcome to our overview of the Swedish construction market. In November we refreshed our forecast for the European and global construction sectors, and Sweden was a key part of that update. I’m Marcel and over the next few minutes I will explain how we have adjusted the outlook for residential building, non‑residential building and civil engineering, and answer the question that most of you are asking: when will growth return to the Swedish construction industry?

During the past two years Sweden experienced a sharp decline in investment across both residential and non‑residential segments, making it one of the countries hardest hit by the current construction crisis. Nevertheless, our 2025 forecast now shows the first modest increase in construction investment since 2021. The recovery, however, is slower than we had originally expected.

Residential building

Earlier this year we revised our projection from a 2.5 % rise to a much more modest 1 % increase compared with the previous year. The downgrade reflects the slower‑than‑anticipated market rebound. Looking ahead to 2026, we now expect a stronger upswing: residential‑construction investment is projected to grow by roughly 8 % next year. This optimism is supported by the last three quarters, which have shown a steady rise in building permits, indicating growing demand.

Non‑residential building

Investment in this segment fell by 14 % in 2023 and by 8 % in 2024. After revising our outlook downward, we now anticipate a very modest 0.5 % growth in 2025, far below the previous 2.4 % estimate. The weaker outlook stems from two opposing forces. Private developers have postponed office, production‑site and other projects because of economic uncertainty, while the public sector has stepped up its spending. The Swedish government is allocating more funds to military facilities and other public‑sector projects, providing a more stable source of demand that is now driving the limited recovery.

Civil engineering

This segment is performing better than both residential and non‑residential construction. Investment in infrastructure – energy networks, railways and other public works – has been steadily rising in 2024 and 2025, and we expect continued growth in 2026. Public‑sector projects tend to have longer planning horizons and more secure financing, which makes civil‑engineering activity less volatile.

Overall outlook

In 2025 we see only tentative, thin growth across the Swedish construction market. The signs of recovery are present but modest. By 2026 the picture improves markedly: residential construction is expected to grow by about 8 %, non‑residential by around 0.5 % and civil‑engineering by a solid margin, leading to a stronger overall market recovery than in 2025.