14 May 2020
Posted in Construction
Despite no-lockdown policy, COVID-19 expected to contract Swedish construction industry by 4% in 2020, says GlobalData
The gloominess in the Swedish construction industry will worsen further due to COVID-19, with the industry expected to contract by 4% in 2020 despite the country’s no-lockdown decision, says GlobalData, a leading data and analytics company.
Reflecting the lack of strict containment measures – for large parts of the economy and the construction industry, this has meant businesses are continuing as usual, with the construction works continuing at sites.
Swedish multinational construction company Skanska AB has stated that it would aim to keep most construction projects running during the COVID-19 crisis. The company has taken precautions to protect its workers from the spread of the virus, and imposed an international travel ban for all its 35,000 employees.
Danny Richards, Lead Economist at GlobalData, comments: “Demand for housing is expected to slow significantly this year as unemployment increases and incomes are constrained as the virus outbreak impact is getting worse in Europe. The government expects that the unemployment could rise up to 13.5% in 2020, due to negative impact of coronavirus on the economy.”
Although the direct impact may be relatively low, the construction industry has been weak, notably the residential sector, which is the largest market in the Swedish construction industry.
Richards concludes: “The Swedish government is likely to invest in the infrastructure sector in order to offset the weakness in the construction industry. Sweden’s central bank has also announced lending support of SEK500bn (US$51bn) for the companies suffering from COVID-19 outbreak.”