Market Monitor construction Sweden 2019

Market Monitor

  • Sweden
  • Construction

21st February 2019

Competition in the Swedish construction sector is high and consolidation is ongoing, with financially stronger groups buying financially weaker peers.

 

  • In 2019, demand and margins are expected to remain stable in some segments like office buidlings and civil engineering. However, the market for building new malls and hotels is
    2019 mm cons sweden pic1
    increasingly mature. The residential building subsector shows signs of decreasing demand, which will have a negative effect on businesses´ margins. Additionally, increased commodity prices and high prices for building sites in Sweden have a negative impact on construction.
  • Competition in the Swedish construction sector is high and consolidation is ongoing, with financially stronger groups buying financially weaker construction companies. This consolidation trend is also present in the construction materials segment.
  • Construction businesses are often highly indebted, especially those active in the real estate and housing construction segment. Banks are increasingly reluctant to lend to this subsector, while being more willing to provide loans to companies active in other segments.
  • Payment duration in the industry is 30-45 days on average. The level of protracted payments is high, and both payment delays and insolvencies increased in H2 of 2018. This deteriorating trend is expected to continue in 2019.
  • Our underwriting stance is restrictive for businesses active in residential construction and for subcontractors depending on it. The subsector is impacted by tighter access to bank financing and expected to face a substantial decrease in demand. At the same time we are less restrictive on commercial construction. While this subsector is facing a decrease in demand, businesses and end-customers are generally financially healthier and have easier access to loans. We are generally open for businesses active in public construction, where businesess and end-buyers are more resilient than other segments.

 

 

 

 

 

 

Related Documents

Disclaimer

Each publication available on or from our websites, such as, but not limited to webpages, reports, articles, publications, tips and helpful content, trading briefs, infographics, videos (each a “Publication”) is provided for information purposes only and is not intended as a recommendation or advice as to particular transactions, investments or strategies in any way to any reader. Readers must make their own independent decisions, commercial or otherwise, regarding the information provided. While we have made every attempt to ensure that the information contained in any Publication has been obtained from reliable sources, Atradius is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information in any Publication is provided ’as is’, with no guarantee of completeness, accuracy, timeliness or of the results obtained from its use, and without warranty of any kind, express or implied. In no event will Atradius, its related partnerships or corporations, or the partners, agents or employees thereof, be liable to you or anyone else for any decision made or action taken in reliance on the information in any Publication, or for any loss of opportunity, loss of profit, loss of production, loss of business or indirect losses, special or similar damages of any kind, even if advised of the possibility of such losses or damages.