According to Global Data, construction revenues in 2021 exceeded $270bn across the key markets of Denmark, Finland, Norway and Sweden. And, with further strong growth predicted, this could be a golden era for construction in the Nordics.
The industry is on the whole optimistic about opportunities to build back stronger following the pandemic. But alongside growth comes change, and firms are seeking to lay down solid foundations to ensure they can successfully sustain transformation.
Crucial to the success of any change is the people who deliver it. And while we’re seeing more construction companies embracing change to deliver more efficient and sustainable outcomes across the region, the rising materials prices, workforce shortages and cost of living crisis is causing many challenges.
We’ve surveyed 1,000 construction professionals throughout Denmark, Finland, Norway and Sweden to understand the state of the industry today and the role talent will play in delivering a sustainable future.
Construction in the Nordics is generally recovering well post-Covid. A strong majority of businesses project their revenues will increase in the year ahead: overall, 66% expect their income to grow, with 28% predicting a decline.
To deal with this demand, getting more people on board and boosting skill sets will be key to fuelling growth. Some 63% of construction firms are recruiting right now; rising to 70% of contractors, compared with 56% of subcontractors.
Against this backdrop, however, 84% of companies are finding it difficult to recruit. Around a third of firms (34%) struggle to offer competitive salaries, pointing to the rising price of materials and a need to balance the books without breaking their wage structure.
In this context, getting recruitment right and increasing staff productivity are vital. This is an area where digital construction tools can help.
With 84% of firms struggling to recruit, there are clearly skills shortages in construction in the Nordics. Almost one-third of them (32%) are concerned by a general lack of skilled labour in the market. Businesses believe both traditional (20%) and digital (23%) skills will be in short supply during the next decade.
Education is a key factor, with professionals stating colleges aren’t teaching necessary construction skills (20%). But they also admit construction firms are failing to invest in training (23%).
Perhaps because of this low-profile approach to seeking new skills, the industry has an image problem. In fact, the most common reason given for projected skills shortages in the next five to ten years is a belief that construction is less attractive than other sectors (25%).
While national campaigns may be needed to boost skills and recruitment, upskilling will be crucial both at a company level and across the industry, to ensure the availability of the changing skills required by businesses.
Nordic construction companies plan to invest in a range of areas during the next two years. Talent and infrastructure come out on top. Recruiting new staff, buying new equipment and spending on IT are all considered leading areas for investment (22% each).
Every business we surveyed stated they will invest in at least one emerging type of technology, or modern methods of construction, in the next five years. Tied as top priorities are investment in data analytics, artificial intelligence (AI) and cutting-edge approaches such as off-site manufacturing (all 28%).
Smart digital investments are the way forward, to improve firms’ output today and create a platform for future change.
Investing in different types of talent is also a priority for some companies. While diversity and inclusion is not the top priority for construction firms, almost one-fifth (18%) are committed to investing in it over the next two years.
There is some anxiety among Nordic construction companies that they aren’t fully equipped to deal with forthcoming regulations. Three in ten businesses in Norway (30%) voice this concern.
In addition to local legislative developments, construction professionals also have a keen eye on ESG regulations - especially sustainability. Firms are navigating existing or forthcoming net-zero targets from Nordic governments – and many are struggling to understand new policies and their role in delivering them.
For example, just 4% of companies in Finland strongly agree they understand the government’s net-zero agenda, and 5% strongly agree they know what construction firms should do to help achieve targets.
Firms are trying to be proactive, though, with 21% planning to invest in zero-carbon technology and 21% rolling out an ESG strategy.
There is also an opportunity for businesses to use digital information-sharing tools to improve quality and build right first time – immediately reducing waste and improving sustainability. Materials tracking can also enable firms to better understand the impact of every build, to support ongoing environmental efforts.
For sure, construction in Nordic markets seems to be on the up. But to seize the opportunities created, firms will need access to a steady stream of talent and smartly combine these skills with the latest technology.
The right tech can build multiple benefits for businesses - from providing process automation that boosts productivity, to delivering common data environments and underpinning a more sustainable approach to construction.