Veidekke: The growth in the Scandinavian building and construction market continues, but international pessimism causes uncertainty

Today Veidekke presented its economic activity report for the Scandinavian building, construction and housing market. The outlook ahead indicates high activity in Norway and Sweden, while the situation in Denmark has deteriorated following a transitory increase in the first quarter. However, increasing international pessimism is contributing to a rise in uncertainty going forward.

"Norway and Sweden have demonstrated remarkable resilience in the face of dwindling international markets, with a growth in GDP of 1.0% and 1.4% respectively in the second quarter. In Denmark the situation is more directly affected by the slump in the Euro zone, and we are expecting zero growth this year," says Rolf Albriktsen, Strategy and Market Director with Veidekke.

Activity remains high in the Scandinavian building and construction markets. In Norway and Sweden activity is high in all market areas. Growth in building and construction investments in the Norwegian market is estimated at 6% for the current year, an adjustment of 1 percentage point up from the March economic activity report. In Sweden a continued high level of activity is expected, but growth is levelling off.

"For Norway in isolation, the outlook is still good, and we have increased our estimates for the current year. The high level of activity in the housing market continues, and our forecast of 27,000 homes started for the current year is probably somewhat low. The current high level corresponds to an annual rate of 30,000 units, and if start-ups continue at the same rate throughout the autumn, we may reach this level for the year as a whole. Estimates for growth in housing prices have been increased to 8%, as opposed to expectations of around 7% in March," Albriktsen says.

However, negative international signals in the shape of tighter financial markets and lower investment demand contribute to increase uncertainty in the Scandinavian markets in the longer term.

Veidekke prepares its economic activity report twice yearly. The purpose is both to present the group's view on the building, construction and housing market and the preconditions for macroeconomic development, which forms the basis for our activities in Scandinavia. The forecasts are based on applicable official statistics, in addition to forecasts prepared by Veidekke.

The economic activity report is available at http://no.veidekke.com/ir/rapporter/

For more information please contact:
Rolf Albriktsen, Strategy and Market Director, tel. +47 21 05 75 71/+47 906  91 110, rolf.albriktsen@veidekke.no
Jørgen Wiese Porsmyr, CFO, tel. +47 21 05 76 44/+47 907 59 058, jorgen.wiese-porsmyr@veidekke.no
Kai Krüger Henriksen, Communications Director, tel. +47 21 05 77 04/+47 905 19 360, kai.henriksen@veidekke.no

Veidekke is one of Scandinavia's largest contractors with 6,100 employees and a turnover of NOK 18 billion (2011). Activities include building and construction projects, residential developments, asphalt plants, gravel and aggregates and road maintenance. Our values are professional, honest, enthusiastic and pioneering. Our goals for health, safety and the environment, HSE, have equal status with our financial goals.  Veidekke is characterized by a decentralized organizational model with a strong corporate culture and a high degree of employee involvement. Over half the employees are co-owners, holding 20% of Veidekke's shares between them. The company is listed on the Oslo Stock Exchange and has never declared a loss since it was founded in 1936.