Veidekke (VEI) investor relations material

Market overview and forecasts

• Scandinavian contracting market expected to grow by 6% in 2026 and 1% in 2027 after a 5% decline in 2025, with total market size reaching NOK 970 billion in 2026 and NOK 980 billion in 2027.

• Sweden's 2026 production forecast raised to 10% growth due to strong project starts in late 2025, while Norway and Denmark anticipate moderate growth.

• Civil engineering and infrastructure sectors are key growth drivers, with strong investment in public transport, energy, and water supply projects.

• Residential and commercial building order intake rebounded in 2025, with Norway and Sweden seeing 26% and 27% growth respectively in new apartments and small houses.

• Public building activity is rising in Sweden, especially in health and care, while Norway expects a rebound after a temporary decline in hospital projects.

Economic and geopolitical environment

• Geopolitical tensions, particularly the war in Iran, have led to higher and more volatile energy prices, impacting construction costs.

• Despite elevated risk premiums, financial markets in the Eurozone remain stable, and economic growth in Norway and Sweden is accelerating.

• Household purchasing power is increasing, and unemployment is expected to decline, supporting demand in the construction sector.

• Inflation is close to target levels, with policy rates having been cut and no further stimulus expected.

• Population growth is slowing in Norway and Sweden, driven by lower birth rates and reduced immigration, affecting long-term construction demand.

Construction costs and inflation

• Construction cost inflation in February 2026 was 4.6% in Norway and 2.3% in Sweden, with high wage growth a key driver.

• Material prices have been stable, but uncertainty remains due to volatile energy prices.

• Civil engineering cost indices are sensitive to international fuel prices, with forecasts highly uncertain.

• Timber, steel, and concrete prices have risen significantly since 2020 across all Scandinavian countries.