Throughout the first quarter, the Scandinavian markets have been characterised by a high level of uncertainty about the future. The strongest impact of this has been felt in the market for private non-residential building, but the weak housing market has also contributed to a low level of activity. Although there were certain signs of improvement towards the end of the first quarter, there is reason to believe that increasing unemployment will lead to a continuously weak housing market.

Public investments in a better and more efficient infrastructure have contributed to increased activity within the heavy construction sector. Although we expect a further boost in this area, we do not believe it will fully compensate for the decline in the building market. All in all, we therefore anticipate a somewhat weaker building and construction market.

Risk factors

There was a significant change in the risk situation in the Scandinavian markets during the second half of 2008, due to the growing financial unrest. This applies mainly to the private sectors of the markets, for instance in terms of lack of financing for new projects and delays in the start-up of projects. Furthermore, this situation has increased the risk attached to the execution of projects, due to material suppliers and subcontractors not being able to fulfil their contractual obligations, and it has led to higher customer credit risk.

Veidekke has a strong focus on following the market development, handling the new risk situation, and on implementing necessary measures.