The Swedish Economy and the Swedish Labour Market

1
The Swedish Construction Sector
2
The Construction Sector Today

• Total market size - ca 325 bn SEK 10 per cent
  of GDP.
• Investments ca 225 mdr ca 8 per cent of GDP.
• Over 450 000 employed in the construction
  /housing sector in total - of which 250 000
  employed in pure construction.
• 60 000 companies in the construction sector -
  10 000 with employees.

3
The Construction Sector Today

• A severe recession / depression 1990 1993
• A rapid recovery during the last years
• A boom market 2006 - 2007
• Low construction investments relative to EU
  -average
• Dominated by a small number of large companies,
  but it is the SMEs that are growing
• Internationally reknown and relatively efficient

4
Number of Employees in construction companies 2000
No of employees
Källa SCB
5
Construction investment of GDP
6
Construction investments
Källa SCB, BI
7
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8
No of apartments started 1950-2006
Källa SCB, BI
9
Regional construction investments in 2005SEK mn
Källa BI
10
Hot topics

• General perception and knowledge of the sector
• Uncertain playing field
• Labour costs
• Internatialisation
• Industrialisation
• Shortage of labour 10 years ahead?

11
In the general debate the picture is

• Construction investments in Sweden are high
• Housing standards are high houses are modern
• Constructions costs have risen extremely fast
• The Swedish construction sector is ineffecient
  and expensive
• But the truth is quite different

12
In reality.

• Construction costs in Sweden are relatively low
  but housing costs/living costs are high
• Existing cost statistics are unreliable
• but the most rapidly rising costs are land
  prices and local fees
• Productivity growth in Sweden relatively good in
  an international comparison. Productivity levels
  high in Sweden.
• Construction investments in Sweden are low..
• The housing vintage is relatively old

13
Housing stock by vintage within EU
14
Construction costs (high quality)for apartment
houses in EU 2001
Källa Gardiner Theobald
15
Housing costs as of total consumptioncosts in
EU 2004
Källa European Housing Statistics
16
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Sustainable construction

• Cooperation within Byggsektorns kretsloppsråd
• BASTA A EU-life co sponsored projekt
• Own projects chemicals, energy, waste
• Include environment/sustainability in everything

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The Ecocycle Council Unique form of Cooperation
The Ecocycle Council is an association of around
30 organizations within the Swedish building and
real estate sector. The aim of the organization
is that the building sector, through voluntary
efforts, on market grounds and in close
co-operation with authorities and legislation,
succeeds in conducting credible, effective,
co-ordinated and systematic environmental work
that results in permanent environmental
improvements.
19
The Constructions Sector faces tougher
international competition and a rapid
restructuring process? Will we succeed?
20
Foreign companies on the Swedish construction
market
Yesterday A sheltered sector

• Igår En skyddad sektor

21
Tougher competetion

• Tougher competetion on the household market
  (primarily in the major cities) Swedish
  blacks are losing ground
• Tougher competetion on large infra structure
  projects
• Tougher competetion for UEs
• All other subsectors will follow

22
What have other sectors done?

• Increasing imports lower costs
• Restructure the supplier system
• Focus on core activities
• Focus on the customer
• Partnership with suppliers and customers
• Make use of foreign RD
• DO not compete with low prices, but with qulaity,
  innovations and customer satisfaction
• Protect and take care of your brand name
• Improve productivity

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Why should the Swedish construction sector
succeed?

• Efficient and low costs
• Good recruitment popular to choose a
  construction education
• Top level in health and safety
• Gone through more of restructuring than most
  other old EU-countries
• Rapidly growing markets very close by (Poland,
  Russia and the Baltics)
• No big excess labour supply anywhere

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To Conclude

• Good Market Prospects in the coming Years
• A rapid restructuring of the Swedish business
  sector and tougher environmental standards
  improves and affects construction market
  prospects
• Repair and Maintenance a growing Subsector
• Tougher Competition and Restructuring