Stockholm Chamber of Commerce - Construction sector in Stockholm slows down

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Construction sector in Stockholm slows down

The Stockholm economy seems to have passed its cyclical peak. The Stockholm barometer for the second quarter of 2018 falls in line with the level of normality. Meaning that growth in the capital region is clearly weaker than in the same period last year. At the same time, the employment rate within the construction sector is at its weakest in five years.

- Many signs are pointing to the fact that we have passed the cyclical top of economic growth and that the capital region has entered a period of weaker growth, Andreas Hatzigeorgiou, Chief economist at the Stockholm Chamber, says.

Despite the Stockholm barometer slightly delivering upwards from previous quarter does not change the situation. After a period of very strong growth, it is now only at the historical average.

Therefore, the Stockholm barometer performs weaker than in 2010 and still performs under the level than the entire year of 2017.

- Two weak quarters in a row is against the argument that this is only a temporary disturbance in the curve. Furthermore, politicians have not worked with the bottlenecks that we previously have warned against, such as the housing shortage or the labor shortage. It would be unfortunate if the economy falls into a weaker period, Andreas Hatzigeorgiou, says.

Although the housing shortage looms, the construction sector has long struggled in the confidence-indicator in Stockholm.

During the second quarter the construction sector records a considerable downturn. The confidence-indicator falls significantly with five points. It is part due to more negative outlooks for the construction sector.

- Despite having a housing shortage and therefore should have a high demand in dwellings, the sector is shaky. This is probably due to the many quick changes in legislation regarding mortgages, which have slowed down the entire market, Andreas Hatzigeorgiou says.

Swedish version