Veidekke

Earnings Release • Oct 30, 2019

Veidekke ASA: Stable building construction market expected going forward

Veidekke ASA: Stable building construction market expected going forward

At the start of a new decade, the Scandinavian building construction market

looks more stable than for many years. Veidekke expects steady, relatively high

activity in Scandinavia in 2020.

For the time being, the highly cyclical housing market appears to be past the

largest fluctuations.

"Most major metropolitan areas are experiencing moderate price growth and a high

number of transactions in the secondhand housing market. However, the number of

new home sales is also rising steadily, and national statistics bureaus are

reporting a tapering off of construction costs," says Veidekke Director of

Analysis Kristoffer Eide Hoen.

A couple of years ago, the number of construction starts for residential

projects launched in and around Stockholm and Oslo was very high. The number is

now far smaller, helping to stabilise - and in some areas reducing - the supply

of unsold new-build apartments.

"Against this backdrop, 2020 should bring moderate growth in the number of

residential new-builds in Oslo and Stockholm, and generally stable residential

construction activity elsewhere in Scandinavia," says Hoen.

As regards the building construction market otherwise, Hoen points out two

particular segments worth monitoring as 2020 approaches:

"Growth in both the railways market and the market for health care-related

buildings is being fuelled by clear ambitions and public financing, and activity

levels are set to rise substantially in these segments. Although demand for

industrial and logistics buildings is also boosting construction activity, we

expect that generally weaker economic conditions may dampen further growth in

this segment after 2020."

"The underlying market drivers are generally strong and are further supported by

the interest rate outlook," says Kristoffer Eide Hoen. "In our view, weak

international economic conditions represent the greatest risk. We have

previously seen that these may impact investment appetite among businesses and

purchaser confidence in the housing market. However, based on our current

insights, we take a positive view of the building construction market outlook

for the next few years."

Veidekke's complete analysis of the Scandinavian construction and civil

engineering market is available on veidekke.com.

For more information, please contact:

Kristoffer Eide Hoen, Director of Analysis, Veidekke ASA, +47 976 75 434,

Kristoffer.Eide.Hoen@veidekke.no

Veidekke's press images (https://veidekke.fotoware.cloud/fotoweb/archives/5028

-Pressebilder-Veidekke/)

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Veidekke is one of Scandinavia's largest construction and property development

companies. The company undertakes all types of building construction and civil

engineering contracts, develops residential projects, maintains roads, and

produces asphalt and aggregates. The company is known for its involvement and

local knowledge. Its annual turnover is approximately NOK 36 billion, and half

of its 8,600 employees own shares in the company. Veidekke is listed on the Oslo

Stock Exchange and has always posted a profit since it was founded in 1936.