Response to interpellation 2023/24:208 on the crisis in the construction industry and its impact on the labor market

Statsrådet Andreas Carlson (KD)

Madam Speaker! Serkan Köse has asked the Minister for Employment and Integration what measures he and the government intend to take to strengthen the labor market within the construction sector in light of the serious crisis. The work within the government is distributed such that it is I who shall answer the interpellation.

Just as Serkan Köse describes, the economic crisis is hitting the construction and civil engineering industry hard. It is a tough economic situation where many companies are being pressured hard by high inflation, rising interest rates, increased construction costs, and reduced purchasing power among households. It is a development that is primarily due to global factors which, in the short perspective, are very difficult to influence.

To alleviate the effects of the economic situation, the government in the budget bill for 2024 has announced that the ceiling for the rot deduction shall be temporarily raised to save jobs in the construction sector. Through the announced proposal to raise the ceiling for the rot deduction to 75,000 kronor during 2024, the demand for rot work is assessed to increase during a period when the demand for other construction and civil engineering works is expected to decrease. The government wants to promote employment within the construction and civil engineering industry so that competent labor remains within the construction sector when the economy turns. During the financial crisis, much competent personnel disappeared from the construction sector, which meant that it took longer to increase the construction pace when the economy turned.

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Serkan Köse (S)

Madam Speaker! I thank the Minister for the answer. Even though the interpellation was addressed to Minister for Employment Johan Pehrson, I am glad that Minister Andreas Carlson is taking the debate. But such an important question requires more answers, more analysis and more discussion, and therefore it is somewhat worrying that the answer is so short and that one does not really address the challenges and problems that exist today in the Swedish labor market, not least considering the deep crisis we have within the construction sector.

I agree with the Minister that this is the toughest economic crisis since the 90s. Many Swedish families with children are affected. Especially single parents with small economic margins are now struggling with how they will make ends meet. Shrinking economy and high inflation create gigantic challenges on the Swedish labor market. At the same time, the population is growing, and there is a great need for more housing.

Madam Speaker! According to Boverket's forecast, the number of housing projects started is expected to decrease dramatically over the coming years. With a growing population and a large historical housing shortage, it is now clearer than ever that at least 67,000 new homes are needed annually until 2030. Despite this, Boverket's latest forecast indicates that only 20,000 new homes will be started during the next year, which is far from sufficient.

Industry representatives, one after another, are writing article after article about the crisis within the construction sector. They say it is the most extensive since the 90s crisis. The number of bankruptcies and layoffs within the construction sector is now at the same level as then. Therefore, actors within the entire community construction sector, such as Byggnads, Hyresgästföreningen, Byggföretagen, Sveriges Allmännytta, and HSB, have demanded that the government take responsibility and establish a housing commission to solve the construction crisis and the housing shortage.

In view of this, on November 20, I submitted a written question to Minister Andreas Carlson as to whether he considered that a housing commission was needed to develop concrete and long-term solutions to today's crisis. The Minister replied that the government does not intend to appoint such a commission and referred to the fact that reforms are needed to address the structural problems that exist in the labor market and the housing market. It is about simplifying building regulations, encouraging home ownership, and so on. Is this the solution to the structural problems that exist within the construction sector today, Andreas Carlson?

Madam Speaker! It looks bleak. So far, there have been approximately 7,000 notices within the construction industry, which is an increase of 160 percent compared to before. Bankruptcies within construction and civil engineering are also increasing. In my home region, Stockholm County, the situation is particularly acute. Here, half of the construction workers risk becoming unemployed. The number of layoffs has increased by 167 percent compared to the previous year. The trade union Byggnads reports that the notices have increased significantly in recent months. It is so serious that construction workers in Stockholm have even started a petition demanding support measures from the government. A couple of them are sitting in the gallery and have been waiting for this debate for hours to hear the Minister's answer on how the government will handle the crisis.

What is your answer to the construction workers, Andreas Carlson?

(Applause)

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Mikael Eskilandersson (SD)

Madam Speaker! I did not hear a single proposal from Member Serkan Köse except for a housing commission, which in practice would not involve any proposal at all.

Jennie Nilsson, who is the Social Democrats' spokesperson on housing issues, was quite clear when she said that the Social Democrats do not talk about just any issues, but there is only that which the Social Democrats already want. And that which we know the Social Democrats want is okay to talk about, nothing else. It was at least not okay to talk about, for example, free rent setting.

The crisis is hitting the construction companies hard. We know that. One does not need to repeat that for four minutes and then still not come up with any proposals to solve the problem.

The increased interest rate and inflation shall reduce demand. That is how it has been thought from the Riksbank. That is why the interest rate has been raised. It is so that inflation shall go down, so that demand shall become less when money begins to cost more. It is this system that we have built up. The alternative is to do nothing at all and to let inflation make us all poorer. That would be worse.

The Riksbank has somehow succeeded. Demand has decreased. It has perhaps decreased most of all when it comes to expensive investments. Therefore, it hits the construction sector hard. Building is often the largest investment one makes in life. One might not want to do it in a situation where it is uncertain what the interest rate will land on and how much it will cost.

We also know that everything happens in cycles. In the Bible, there is talk of the seven fat cows being eaten by the seven lean ones, and one could perhaps liken this to the fact that we have actually had eight quite good years with a doped economy and very low interest rates that have made money very cheap. The big question is why more was not done during the early good years. Why did one not ensure that the construction process was accelerated, so that it would be quick to start building again when the economy turns upward?

During what has gone down in history as the era of the many housing ministers, that is, during the time when the previous government ruled, very little was done to create a strong, well-functioning and efficient construction market. For eight years, there were more proposals that made construction more bureaucratic than those that made it simpler, faster or better.

Madam Speaker! If one looks at what has been done, one can see that very little has facilitated construction during the previous parliamentary terms. Neither climate declarations, requirements for equality reports, nor even building permit exemptions for weather protection for public transport represent a significant step towards a better and more efficient housing market.

Certainly, individual improvements were made during the last parliamentary term, but it was usually after the opposition had submitted one or sometimes several motions. The opposition had to push the government forward to get changes through. Sometimes it was even to the extent that we in the Committee on Civil Affairs were forced to write the law ourselves because the government was not ready to do so for something we had a clear majority for here in the Riksdag. I am thinking primarily of the noise regulations or the regulations that made "attefall" complementary buildings possible. It was constantly us who had to push to ensure that anything would happen at all.

Now we hear Social Democratic members standing here in the chamber complaining that it is not working today. But how it works now is, after all, to large extent the result of what was prepared during the previous eight years of Social Democratic rule?

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Leif Nysmed (S)

Madam Speaker! I shall begin by politely thanking the Minister for Housing for his answer on the labor market issue. I actually do not know why he is answering it, if I am to be honest, because I do not think I hear any answer to the question that the interpellator asked, namely how the jobs in the construction industry are to be saved.

The only answer given is that a temporary increase of the roof deduction shall be made to save the jobs in the construction sector. The collapse in the construction market today is on par with that which was in the 1990s. At that time, approximately 20,000 construction workers disappeared from the industry. They never came back. It was qualified labor. Furthermore, it was a large number of young people who actively chose away from the construction program, because they did not want to choose an education that led to unemployment and insecure employment.

The rotavdrag shall be temporarily increased during 2024, it is said in the response, but that is incorrect, as it shall occur first during the second half of 2024. It is thus a half-year-long rotavdrag which, in our opinion, is also misdirected. It is namely only directed towards those who can perform somewhat more expensive conversions or renovations.

One could instead make a slightly broader root investment that could involve energy and climate adaptation of one's own housing. That would have given a broader and better result than this. This will not create new jobs. Perhaps those who do expensive renovations will have a bit more left in their wallets, but it will not create any new jobs. It will also not save all those thousands of construction workers who are now being laid off or given notice. I think the answer is conspicuously absent.

Then I enjoyed a bit listening to Mikael Eskilandersson's mocking. If he now thinks that nothing happened during eight years, he has not read what we are in agreement with the Housing Minister about, which we spoke about in a previous interpellation. It concerns a ten-page document where we have gone through some of the things that have actually been done.

He has also missed that the problems that often exist in PBL actually stem from the Alliance government that produced the current PBL. The problems that have arisen, we have tried to rectify during eight years of minority government - it is not always that we have gotten the opposition with us. For eight years we have also tried to achieve cross-bloc dialogues and agreements, because housing policy is long-term. It is nothing that is solved during one parliamentary term.

During the first term, we agreed on 22 points with among others the Moderates and the Christian Democrats, but they chose to step down, as they did not want to make another agreement with the Löfven government. It was for reasons of prestige, I assume.

During the second term, we actually had a cross-bloc agreement with the Liberals and the Centre Party where we tried to achieve long-term stability in housing policy. But even this was shot down.

I believe that the industry wants to see long-term thinking in this to address some problems that we actually agree on many times. But that requires letting go of the Sweden Democrats' hard stranglehold and having the stamina to sit down and discuss with the other opposition parties to see long-term what happens after the next election, when one no longer has a majority in the Riksdag.

(Applause)

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Sofia Amloh (S)

Madam Speaker! I take issue with the latter part of the Minister's response. There is talk of a lack of competence and of competence among personnel disappearing from the construction sector, which did happen during the last recession. Today we see the same thing.

As my colleagues have reported, we are in a serious crisis in the construction sector. I have personally visited several companies and workplaces and met construction workers who are covered by notices of dismissal. They risk being thrown into unemployment in a few weeks at a time when one might want to have a secure income, not least because there is an economic crisis in general, but also because Christmas is knocking on the door.

It is a terrible feeling in the body when one loses their job and enters the insecurity that this entails. It is not just about finances, but also about the belief in whether one is needed or not and when one will be needed again.

I intend to take hold of what I encountered out at the construction sites, namely that there were many young people who were there to complete their education and who have chosen to work within the construction industry. They have chosen to become concrete workers or carpenters and have a few months left before they have completed their entire education and are finished. Also, they are now being sent home, even though they do not cost the company anything. It is part of their education, but they are not allowed to complete it. They have made the choice. They have studied. They are out practicing and learning the trade. Now they, even though it is only a matter of a month or two, are not allowed to complete this but are sent out into unemployment.

My question is what the Minister is doing about this situation, given that we have seen from previous crises that it is precisely the competence that disappears. How shall we safeguard these young people so that they do not end up in unemployment? And if they are to do so anyway, they can at least do so with a full education, so that they stand ready to take a job where they live or somewhere else where construction takes place or begins when the time comes.

My question is: What is the government doing so that these young people, firstly, will be able to make use of their education and, secondly, get a good chance as soon as possible?

(Applause)

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Statsrådet Andreas Carlson (KD)

Madam Speaker! I thank you very much for the commitment to this very important issue. I truly appreciate it. I believe it means an enormous amount if, as a worker in a very tough situation, one receives a visit from a Member of Parliament and is highlighted in this way in the chamber today.

I share the view that the situation is very tough, very gloomy and very serious. The economic situation has had a major impact on the construction industry. This I see, not least during my own visits around the country and in my contacts with various representatives for the sector.

The cost increases and inflation have driven up prices. Inflation affects cost increases in both financing and production. The high inflation combined with the recession we are currently in and which we appear to remain in for a while is a combination that hits the entire society very hard, not least the construction industry.

So that is how it has been in previous recessions. What is tougher this time is that we also have a situation where inflation is very high. Therefore, it is one of the most important measures the government can take to have a slightly contractionary and responsible budget aimed at keeping inflation down, so that fiscal policy does not counteract monetary policy.

Now it looks like it is moving in the right direction, but it is too early to call off the danger. If, however, through perseverance we should end up in a situation where we succeed in bringing down inflation to normal levels, there are other tools in the toolbox that the government can consider, if the economy stalls and unemployment rises. I want to say in this important debate that this is not something the government rules out. The government is always prepared to take measures and act.

It is a tough situation that we are following with great care, not least because the situation itself is tough - the members have described what it is like for those who are affected - but also for what it would mean for society as a whole if we lose competence that is necessary to build housing in Sweden in a situation where 180 of Sweden's municipalities report that they have a housing shortage.

In the answer that I have read out in the chamber here tonight, Madam Speaker, I have pointed out a measure to save some jobs in the sector. Just as Mikael Eskilandersson touched upon in his contribution, the government has had to take over a table with quite a few unresolved, unclear and unimplemented reforms of a structural nature in order to make land available for construction, shorten lead times in all parts of the construction process, and simplify and improve regulations.

We would, of course, have been in a better position if all of this had been in place and if there had been more of those types of structural measures now that we are entering and are in a very tough economic situation. We continue to work on this. Serkan Köse can feel secure in this, even if everything did not fit into the interpellation response today.

The purpose of the rotation of the withdrawal is to save some jobs, and we have a number of other measures in the budget. It is the structural reforms that need to be put in place. Much work has already been initiated there, and we are following the situation closely. We are, of course, prepared to take the measures required to ensure that we manage as well as possible out of this crisis and obtain a good and functioning housing market so that the number of homes can increase in the future.

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Serkan Köse (S)

Madam Speaker! I thank the Minister again for the answer.

The crisis is here and now, Minister. We cannot afford to let housing construction collapse.

Educational places must be met with more student housing with reasonable rent levels. We also see that large industrial establishments, not least in northern Sweden, are in full swing and that there is an acute need for housing in municipalities that until recently have not had any major population increase.

We Social Democrats therefore propose that a state construction stimulus be introduced in the form of a production subsidy aimed at smaller towns with large industrial establishments as well as to youth and student housing.

To speed up housing construction throughout our country, we Social Democrats also propose state building credits for housing construction. The building credits should be issued to both lower the investment cost and the financial risk for developers so that they can carry out the socially beneficial measure that new production of housing entails.

This is, among other things, an answer to the Sweden Democrats' question of what the Social Democrats want. It would be interesting to hear what the Sweden Democrats want. We are in a housing crisis, a crisis where many people, not least young people, do not have the means or opportunity to move out of their parents' homes. This is something the Sweden Democrats must be able to address. Almost 200,000 young people live at home involuntarily. What is the Sweden Democrats' answer, and what is the government's answer? Where are the reforms?

Again: Layoffs and unemployment are increasing, but the reform list is empty. It would be interesting to hear something from the Minister for Housing regarding labor market policy. We have very many people being laid off now. The Construction Workers' Union is here and listening to this debate. Many of their members are today worried about losing their jobs. They do not know how long they will have a job.

What is the answer? Is it the extended temporary renovation deduction that is the answer for all these construction workers? It would be interesting to hear. What do the Sweden Democrats say, who are part of the government? It sounded more like that the Sweden Democrats decide more than the government.

I have brought with me a couple of articles: Construction companies report that many are being laid off, according to new reports from Arbetsförmedlingen, and construction workers in Stockholm may be laid off. Article after article, we learn what is happening in the construction industry. There are even those who appeal to the government for money as the construction crisis deepens. In a joint letter, unions and employers urge the government to activate short-term work to save the Swedish timber industry.

The crisis is so deep that one cries out for help, and then the government must be able to address the problem and say how it shall be handled. Leif Nysmed touched upon the loss of competence. 20,000 construction workers have left the industry and will never return. The Minister addressed this slightly in his response. Such a development would mean the loss of an entire generation of competence.

The answer to this, Andreas Carlson, is not a temporary increase of the tax deduction for renovation. It also does not help that the government and the Sverigedemokraterna have, among other things, chosen to abolish the investment support for new rental housing. This decision affected 18,000 planned homes, and it risks worsening the housing shortage, raising rents, and leading to an even deeper economic slump for very many people.

Again: If we are to manage the competence challenge within the construction industry, what is the government's answer? What tools are there in the labor market toolbox that Andreas Carlson can use so that we can retain the competence, not least within the construction industry? It would be interesting to hear what the answer from the government is when it comes to, not least, the question of labor market measures.

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Mikael Eskilandersson (SD)

Madam Speaker! When I sit here and listen to Member Serkan Köse, I think: How lucky that the Social Democrats are not in power!

They have completely missed the major problem we have today with inflation. They talk about pumping out money for this and that. It is subsidies, and it is one addition after another that they believe would be needed. At the same time, it would mean that the Riksbank would have to raise the interest rate further.

What do the construction companies actually say regarding the possibilities of building today? I believe that a stable interest rate and low inflation are what they desire most of all.

When it comes to a green rotavdrag that the Socialdemokraterna propose as some kind of alternative rotavdrag, we all know how it would work in practice, or perhaps how it would not work in practice. It would become some kind of cheat-rot where the one who dares to take the most turns is the one who dares to make the most deductions. For which builder would say no to slightly rewriting what they have actually performed?

It is, in some way, about survival for the builder. One must therefore have an understanding that a builder might write that an interior wall they have executed is instead an additional insulation of an exterior wall. And suddenly, it provides a lot of extra money in the coffers.

Where is the justice for the person who, a few years ago, added insulation to their exterior walls and who today cannot build a new kitchen? But the person who, a few years ago, ignored the energy costs and renovated their kitchen could today add insulation to their exterior walls. What is the justice in that?

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Leif Nysmed (S)

Madam Speaker! I noted that I did not quite answer what had been done during the previous term. The construction of half a million homes was initiated during the last eight years. It was a fairly good addition that was in demand on the housing market.

Boverket writes themselves: "Housing construction over the last five years has kept pace fully with the population growth, which has resulted in the latent housing construction need decreasing after having successively increased for a long period."

So this is what the National Board of Housing (Boverket) itself writes. It is not any socialist propaganda, but rather an active housing policy that has been the basis for this, together with a favorable situation with low interest rates.

It is strange that we are debating more with the Sweden Democrats, which shows that it might be them who are governing this government very clearly. Unfortunately, we cannot interpellate the Sweden Democrats in this situation, but it is the government that we must interpellate. And then it is strange that we have more debate with Mikael Eskilandersson from the Sweden Democrats.

Our questions perhaps should be posed to him. Why has the SD-led government implemented zero reforms during this year to get housing construction started? It is evident if we look at the list of government bills from this spring and from the list of government bills from this autumn. And why have the meetings in the Committee on Civil Affairs not taken place? Well, it is because there are no proposals on the floor of the Riksdag. It is empty in an acute crisis.

My question to the Sweden Democrats, who lead the government, is: Where is the economic crisis plan? An active economic policy is required to get the wheels turning again. Perhaps you can tell Ulf Kristersson one fine day when you meet and talk about what the policy should look like moving forward, Mikael Eskilandersson.

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Sofia Amloh (S)

Madam Speaker! It is the member from Sverigedemokraterna who is requesting proposals from the opposition. I think that says quite a lot about this SD government anyway.

But I will ask my question to the Minister again. How are you prepared to face the young aspiring construction workers who now cannot complete their education? I do not think it is good enough to say that it is due to inflation. Yes, it is due to inflation. I agree with that. And inflation hits regardless of the color of the government. But the big difference is how the consequences become and how deep the crisis becomes, which depends on what active policy is pursued.

That is where I think this government is currently failing significantly. There are very few proposals. The government says that it is following the crisis. But that will not be enough. Then this crisis will become deeper than it actually needs to be.

Back to the young aspiring construction workers. They say: "I cost nothing. This is part of my training." No money is paid to them. They are not employed; rather, this is part of their training. So why can they not complete a month or two at the workplace? Why should they be sent home? They are, on the contrary, an investment. It is they who are to be there when things pick up again.

How does the Minister intend to ensure that they can still complete their education? This is still my question.

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Statsrådet Andreas Carlson (KD)

Madam Speaker! Let me begin with Leif Nysmed's claim. No, it is I who am Minister for Housing and answer for the government's questions. On the other hand, we have a very good cooperation with the Sweden Democrats, and we have a majority behind the government's policy in the Swedish Riksdag. That is perhaps something the Social Democrats should also test at some point. But that is how the situation is. I have read in some newspaper that the Social Democrats are more interested in the political game.

There was a time when the Social Democrats were known for tackling social problems, for building Sweden, for caring and maintaining. One cannot blame the Social Democrats for this over the last eight years, because there is a neglected need for reform. A number of inquiries were commissioned, and some good things were done. But it was not enough.

It is striking that Leif Nysmed highlights how successful the previous government was and, in a subordinate clause, slightly highlights that it was indeed a favorable interest rate environment. Money was free, and there was a booming boom for a long time. Despite that, one did not reach a level of construction in Sweden during a single year that corresponded to the needs that Boverket listed existed for each individual year.

Madam Speaker! I wish to briefly answer the interpellator's questions during my remaining speaking time.

We have appointed an investigation and given a mandate to Boverket to produce significant relaxations regarding student housing in order to increase the construction of just that type of housing. It is also important so that young people can move out from home and be able to move to different study locations.

When it comes to new industrialization in the north, Peter Larsson has a mandate from the government to coordinate and facilitate this. I am in close contact with Peter Larsson. He will provide interim reports on the mandate he has, which I look forward to. It is very true that a number of smaller towns today see an expansion pressure that they have not experienced before, at least not for a long time. This does not only concern smaller towns but also quite large cities, where one experiences that one cannot really build in the way one wants because there is no attractive land available.

Here we in the parties that signed the Tidö Agreement have shown that we agree on now reforming the shore protection so that one can build in more attractive areas. This is important, not least for getting the calculations for construction to work, which is something that many municipal politicians all over Sweden - actually regardless of party affiliation - highlight as very important. Early this morning, I was in a radio debate with Daniel Helldén from Miljöpartiet, and he said that they absolutely do not support this. It is of course something that the Social Democrats can reflect on, that is to say how the party views this, but we are in any case in agreement and have a majority for the plan forward for the shore protection.

When it comes to the investment support, even the report compiled by Hyresgästföreningen showed that 40 percent of the support has gone to housing that would have been built anyway. That is, 10 billion kronor that have gone to housing that would have been built anyway. In a situation where we need to take responsibility for the economy and for welfare, and where the municipal sector and not least the regions are bleeding, I think naturally that these funds make a greater difference in welfare. Therefore, a support that is costly and inefficient in this way is not something the government sees as a way forward.

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Serkan Köse (S)

Madam Speaker! I thank the Minister for the answer.

Again: We are facing a crisis in the construction sector. It is a crisis that not only affects the construction industry but threatens our entire economy and labor market. We see a dramatic decrease in housing construction and a 400 percent increase in layoffs within, among others, the timber industry. It is, as said, not just a sector-specific crisis but a crisis that affects the entire society and requires immediate and powerful measures.

I can state that the proposals from the current government, with the support of the Sweden Democrats, are insufficient to meet this crisis. Thousands of workers in the construction industry are on the brink of unemployment, and many companies risk bankruptcy. As I mentioned earlier, the situation in my home region Stockholm is very acute. Half of all construction workers risk unemployment, and the crisis affects - again - not only the construction industry but also ordinary families who are now struggling with the economic pressures.

Unlike the Sweden Democrats and the government, we Social Democrats propose a number of concrete, well-thought-out measures to support the construction sector and stimulate housing construction. This involves everything from state interventions to stimulate construction, such as construction incentives and credits, to a specific focus on youth and student housing. We propose more resources for educational opportunities for skills supply, reinforced labor market policy, and a housing policy that secures the availability of housing where it is needed most.

It is good that Peter Larsson retains his assignment, not least regarding northern Sweden. It was the Social Democratic government that gave Peter Larsson the assignment to coordinate resources and, not least, to ensure that we handle the competence challenge we have in northern Sweden. It is good that he has a continued assignment, and it is certainly good that there is an office. But the question remains: The need is much greater than what the minister has pointed out here, and therefore I ask again why one does not want to establish a housing commission despite the fact that the parties in the housing market demand this.

I thank you for the debate.

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Statsrådet Andreas Carlson (KD)

Madam Speaker! In her concluding remarks, Sofia Amloh was pointing out that we agree that inflation, of course, has an impact. But how deep the crisis becomes depends on how active the policy pursued is, I believe Member Amloh said. That is exactly how the truth looks.

With a very active and expansive policy where one pushes forward in a situation where one needs to take responsibility, one risks however to worsen the situation. It would affect not least young construction workers entering the workforce if one did not do everything possible to bring down inflation so that interest rates can begin to be lowered again and we get more muscles to use in the fight against, for example, unemployment in a recession where inflation is at more normal levels.

It is this responsibility that the government now takes with the policy pursued. I appreciate it if there is a large consensus behind it. I have nothing against dialogue, and I have nothing against conversation. But what the Swedish housing market needs, Madam Speaker, is more solutions and fewer deadlocks. The important thing now is to deliver the reforms that have been needed for a long time. They are of a structural nature and are about making buildable land available in attractive locations, shortening lead times, and simplifying and improving regulations. The government is working on all of this at a high pace.

I thank the Social Democratic members for the confidence if they believe that we could do more in one year in a recession with high inflation than they themselves managed during eight years in a boom where money was almost free. We will, however, continue. We will work hard and present proposals for structural reforms that the Swedish housing market needs – and I appreciate, of course, if there is a consensus when they are laid on the Riksdag's table. I welcome that dialogue.

The interpellations debate was hereby concluded.

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