Construction is still being slowed down by the general uncertainty caused by the ongoing war in Ukraine and the rise in the prices of energy and raw materials. In southwestern Finland, the economic situation has been perceived as good so far, but the outlook for next winter will clearly deteriorate.
According to EK's business cycle barometer, the business cycle expectations of Southwest Finland are slightly more cautious than the rest of the country. During the first half of 2022, the number of house construction starts in Varsinais-Finland increased more than the previous year, and these jobs will continue to provide employment for the rest of the year. However, housing production is predicted to decrease during the next six months.
Cyclical outlook for house construction in Varsinais-Suomi
Based on a survey conducted by the building industry, builders in the Southwest Finland region believe that the amount of work to be done will increase slightly. Growth is predicted especially for repair and office construction. Designers also believe in the rise of renovation construction.
The building construction contractors have so far been satisfied with the work situation, taking into account the prevailing economic situation. Housing production is predicted to decrease clearly over the next six months, but contractors also believe in an increase in the number of renovations. A slowdown in investment decisions and a rise in input prices are seen as the biggest risks.
Construction is a way to revive the economy
"When we are going into a recession and the economy is falling, it is especially important to keep in mind that construction creates economic growth and tax revenue. The immediate effects of construction are employment and tax revenue," states the regional manager of Talonrakennusteollisuus ry Katja Suovo.
According to statistics, about one in five Finns is employed in new construction or maintenance of the built environment. Every million euros spent on construction employs around 15 people in the construction chain. The share of tax revenues is about 40–45 percent of the euros invested in construction.
"Long-term effects from construction are created through competitiveness, leverage and sustainable growth. Housing construction improves the mobility of the workforce, a well-chosen construction site speeds up other construction, and both new and renovation construction can reduce emissions."
"Investments should therefore not be put on hold, but dare to stick to the plans and take advantage of the release of resources due to the recession. Now is the time to implement all the means to make construction smoother and easier, whether it's about processing times for building permit applications or the twists and turns of legislation," says Suovo.
See also
- Cyclical outlook for construction in Varsinais-Suomi, autumn 2022
- Business cycle overview Varsinais-Finland, autumn 2022
Katja Suovo regional manager