Nordic Countries

We are entering the traditional summer slowdown in the Nordic Countries. Many people and companies are on vacation, which naturally slows decision-making and tempers overall market activity; some yards and works are even closed for a time. On a positive note, there was an improvement in sentiment immediately prior to this slower period, with a surge in material coming into yards and a few more deals being made.

With that said, we are still seeing tight margins and fights for material; the number of buyers appears to be increasing in line with the decline in material availability. The forecast is still quite gloomy for the coming months. Uncertainty around US trade policy and political instability around the world are continuing to weigh on economies.

Spring brought turbulence for Sweden, driven by high inflation and concerns around tariffs. This dented consumer confidence and put pressure on the housing market. That said, the outlook for the second half of the year looks more positive; rising real incomes and lower borrowing costs are expected to support a rebound. The labour market is still sensitive but there are signs of improvement: employment is rising and lay-offs are fewer. But even if the recovery unfolds as planned, getting back to a more stable economic environment will take time. Additional support, potentially including a Riksbank rate cut in the third quarter, might still be needed. But as preliminary figures suggest that inflation was significantly higher than economists’ forecasts at 2.9% in June, this may no longer be an option.

Economic growth has picked up in Norway. Notably, productivity has improved and is now close to historical norms. The challenge is whether this will hold, especially with rate cuts being delayed, a deteriorating global trade outlook and expectations of a decline in oil investments. The labour market remains tight and inflation has surprised on the upside. Norges Bank is expected to lower rates in both September and December.

Denmark’s GDP growth is solid, although domestic demand remains relatively subdued. There is still potential for broader-based growth that goes beyond exports and the pharmaceuticals sector. Fiscal policy is becoming more expansionary, largely due to increased defence spending. Even so, public finances remain strong, with healthy surpluses keeping interest rates and bond yields below Eurozone levels. Lower electricity prices are helping to keep down inflation while house prices are rising with support from lower interest rates.

Finland is still in a slow recovery phase but a pick-up is expected in 2025 as both domestic and international demand improve. That said, escalating global trade tensions remain the biggest risk. The housing market has stabilised and falling interest rates are supporting a gradual recovery. Residential construction seems to be reaching a floor. While unemployment remains elevated for now, the government is working on fiscal reforms aimed at supporting growth and balancing the budget, although the public debt ratio continues to climb.