Swedish construction companies face a labor shortage as the market picks up, the latest economic tendency survey from the National Institute of Economic Research showed Thursday.

More than half of construction companies surveyed said finding suitable manpower is the main obstacle to business. This has been a recurrent theme in the institute's recent surveys, and as a consequence of the shortage, some projects may be postponed, said Lars Tullstedt, education and skills recruitment manager at the Swedish Construction Federation.

"You cannot expect the industry to be ready for rapid expansion; it will take some time," Tullstedt said, adding that a large part of the problem is rooted in the 1990s and early 2000s, when not enough people went into the construction business.

"The construction companies are able to recruit young, recently graduated people, but they also need experienced people who can manage projects," Tullstedt said.

The industry has also seen large numbers of employees retiring in recent years, and there aren't enough experienced workers fill the void.

The biggest concern right now is finding experienced project managers, engineers and technicians for civil construction projects, and the problem may be most pronounced for larger companies, such as Peab AB (PEAB-B.SK), NCC AB (NCC-A.SK) and Skanska AB (SKA-B.SK), which are active in civil construction and need to keep their market shares despite retirements and staff turnover.

Peab's chief financial officer, Jesper Goransson, recently told Dow Jones Newswires in an interview that there has been competition for human resources for some time now, but he didn't want to say whether the company had been forced to refrain from bidding for contracts because of capacity constraints.

"We don't see it that way. We are constantly looking to find solutions to fulfil market demands," Goransson said, and his counterpart at Skanska, Peter Wallin, said he doesn't see any long-term capacity constraints. But Wallin also noted that it is hard to find experienced project managers and said Skanska needed to be able to attract people who would otherwise opt for other industries.

"We don't see ourselves competing with NCC, Peab and JM, but rather with companies such as Sandvik AB (SAND.SK), SSAB AB (SSAB-A.SK) and L.M. Ericsson Telephone Co. (ERIC)," Wallin said.

Tullstedt added that although labor shortage is still a major issue in the industry, pressure may be easing as the large-scale retirements seen in the last few years will decrease in the coming years.

"From some regions, I hear people saying that they don't really recognise this picture, and others say that it is starting to ease somewhat," Tullstedt said.

-By Niclas Rolander, Dow Jones Newswires; +46-8-5451-3102; niclas.rolander@dowjones.com

Sandvik AB (PK) (USOTC:SDVKY)
Historical Stock Chart
From Jul 2024 to Jul 2024 Click Here for more Sandvik AB (PK) Charts.
Sandvik AB (PK) (USOTC:SDVKY)
Historical Stock Chart
From Jul 2023 to Jul 2024 Click Here for more Sandvik AB (PK) Charts.