The construction industry is not doing well. There are thousands of unsold new apartments lying on the balance sheets of construction companies. When the housing market does not go well, builders run out of work both on construction sites and in the product industry of the field.
By following the news, it can be difficult to get an idea of how serious the plight of the industry is.
Along with the official statistics, which are often lagging badly behind, the construction cycle can be evaluated based on the consumption of building materials. For example, the use of concrete is quite a good measure of construction activity, because it is needed in practically all construction.
According to the materials of Betoniteollisuus ry, the production of concrete elements has dropped by half from the usual level in the long term. In recent months, the consumption of cement, the key raw material for concrete, has fallen to the level of the deep depression of the 1990s.
Why is it important to be aware of construction delays?
Construction is one of the engines of the national economy. Almost two-thirds of Oy Suomi Ab's investments are construction investments. If we do not build, investments in the future will not be made and the economic growth necessary for a welfare society will not be realized. Even the investments of the green transition have not started to materialize as predicted, but have even decreased. The construction of wind power has downright collapsed.
The construction industry is a big employer. In a normal business cycle, it employs nearly 200.000 employees. The wave of unemployment sweeping over the industry thus pushes a really large number of people to rely on social security, which puts a heavy burden on the national economy.
Another important point of view is that, due to internal migration and immigration, approximately 35.000 new apartments are needed in Finland every year. When this production remains unrealized for several years, the inevitable result is a housing shortage, which leads to a labor shortage in growth centers and a slowdown in economic growth. The price of housing also threatens to skyrocket once again.
There are no more companies at the point
The long-term plight of the construction industry also endangers the financial position of construction companies. The real risk is that after the recession is over, there will no longer be financeable construction companies on the market that could produce even close to the required amount of housing.
Now is the last moment when decision-makers should wake up to the situation in the construction industry. Several decisions reducing state-supported housing production are coming into force. The ARA funding authority should be urgently raised to a higher level than the current one for the years 2025 and 2026. In addition, the construction of right-of-occupancy apartments should be continued. Old, functioning temporary interest subsidy models should also be re-examined.
The consumer market does not solve the plight of the construction industry, and the result is a spiral that destroys the growth of the entire country. It is also necessary to do everything possible to start green investments.
Decisions are needed soon.
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