Sweden's construction cost index declines annually despite monthly increase in February 2025

The Construction Cost Index for multi-dwelling buildings in Sweden recorded a slight monthly increase of 0.3 percent in February 2025 compared to January 2025. However, the annual rate of change remained negative, with a 0.2 percent decrease compared to February 2024. This follows a similar trend from January 2025, which saw a 0.3 percent annual decline.

The February increase was primarily driven by higher costs for contractors, which rose by 0.4 percent, while construction clients’ costs decreased by 0.2 percent. Contractors’ costs, which account for 82 percent of the total index, experienced price increases across multiple categories, particularly in building materials and electricity.

In the transport, fuel, and electricity category, electricity costs rose significantly by 7.1 percent in February, marking a 10.6 percent increase compared to the previous year. In contrast, diesel oil prices declined by 1.1 percent from January and were 6.1 percent lower than in February 2024. Contractors’ costs for building materials increased by 0.7 percent, with woodwork seeing the highest increase at 1.7 percent.

Over the past year, the Construction Cost Index registered a slight overall decline, despite a 3.1 percent increase in contractors’ costs. This was offset by an 11.0 percent drop in construction clients’ costs, largely due to a significant 24.5 percent reduction in interest costs. Other construction client expenses, including plans and central administration, increased between 1.0 percent and 4.1 percent.

Wages and salaries for contractors rose by 3.4 percent, and overhead costs increased by 2.9 percent. In the transport and fuel category, electricity costs surged by 10.6 percent year-over-year, while diesel prices dropped by 6.1 percent. Building material costs rose by 3.5 percent, with wood products and painting materials experiencing the highest increases at 10.3 percent and 8.5 percent, respectively.

Despite the annual decline, construction costs continue to fluctuate due to variations in material prices, energy costs, and financial conditions affecting the sector.

Source: SCB