Key Trends and Issues of Finland Construction Industry

Key Trends and Issues of Finland Construction Industry

Key Trends and Issues:

  • Finland’s construction sector is experiencing a period of weakness. In 2012 construction gross value-added contracted with the pace of decline accelerating during the year. The area covered and the number of new building permits has dropped; the building permits index for area fell.
  • Investor sentiment is low due to the ongoing economic troubles in the eurozone. The rise in income levels in the past three years and the continued growth in the retail and tourism markets is expected to boost industry.
  • Finland benefits from its close proximity to Russia. The number of Russian visitors to the South Carelia region has been recording double digit growth for the past three years. Tourist spending is expected to reach EUR1.6 billion by 2025. Russian tourists typically visit for shopping and leisure. The ease of getting a Schengen visa, the quality of service and the security provided attracts Russian tourists.
  • The energy industry aims to achieve a carbon-free district heating electricity scenario by 2050. The total generation capacity is expected to reach 30,000 MW by 2050. According to the EU renewable energy directive, the country aims to achieve a 38% share of renewable out of total energy usage by 2020 from the existing level of 28%. These plans are expected to boost investments in the renewable energy sector.
  • The country is part of several infrastructure projects underway in Northern Europe. These include the Motorways of the Sea, the Bothnian Corridor, Rail Baltica and the Nordic Triangle. The European Commission has included these projects in its Trans-European Transport Network (TEN-T). The projects are designed to facilitate a smooth flow of goods across the European Union (EU).
  • According to annual Innovation Union Scoreboard by the European Commission, the country is an innovation leader in the EU. The performance of research and innovation has been very high. The country has a highly skilled human capital base along with good support and funding by the government and private sectors. The export of knowledge-based service has been growing at a rapid rate. All these developments support a robust outlook for the construction of research facilities.
  • The population is aging at a rapid pace, faster than its EU counterparts. The proportion of population aged 65 years and above has increased from 12% in 1960 to 18% in 2011. The proportion is expected to reach 26% by 2030. The birth rate is expected to decline at 0.5% per annum over 2012–2050, while the death rate is expected to rise by 0.6% over the same period. With the aging population requiring special care, the government proposed a new act in the 2013 budget to provide health services to the elderly population. A sum of EUR33 million is earmarked in 2013 towards the implementation of the act, with an additional EUR82 million a year expected to be granted from 2015 onwards.
  • Residential construction is expected to witness a period of slow growth in the near future due to worsening macroeconomic environment. The labor market situation is also weakening, with the decline in the working age population and the unemployment rate expected to rise. One positive development is that income levels including wages and salaries have recorded a steady increase
About Anand Sai 84 Articles
Anand Sai has worked in the field of market research as an analyst and a consultant and has also operated at several leadership positions. He has an enormous experience with respect to the compilation of high-quality market research reports and boasts over six years of experience in end-to-end project management. Anand is a dependable voice in the market research field and has been named in some of the top industry publications. He is also a travel junkie and loves to explore new places with his friends.