Response to interpellation 2023/24:241 on measures to increase construction and save the timber industry

Statsrådet Andreas Carlson (KD)

Madam Speaker! Patrik Björck has asked me when I and the government intend to implement measures to increase construction and save the wood industry, which is so important for Sweden and the countryside, and what measures I and the government plan to take.

I want to start by saying that I share Patrik Björck's view of how important the timber industry is for Sweden and for the countryside in particular. I have myself had the opportunity to take part in several timber house manufacturers' descriptions of the situation, and I am well aware of the seriousness of the situation for both housing construction as a whole as well as for the timber house industry.

Sweden is in a difficult economic situation where housing construction is slowing down as a result of global factors such as high inflation and rapidly rising interest rates. The high inflation and rising interest rates have affected households' demand for housing and contribute to high production and financing costs. Housing construction has been significantly affected by the economic cycle, and the outcome for started housing shows that housing construction has decreased significantly over the past year.

The construction industry is affected when fewer people can invest in new housing or in renovations. The government is implementing measures to mitigate the effects and save jobs in the construction sector.

In the budget bill, the government has announced, among other things, that the ceiling for the rot deduction should be temporarily raised, which is assessed to increase demand for rot work and promote employment in the construction and civil engineering sector. It is a measure that makes a difference when demand wanes in the construction and civil engineering sector. The more detailed conditions are set out in a memorandum that is currently under consultation.

A prerequisite for increased detached house construction, and thus the construction of detached houses in wood, is that there is good availability of planned land. Therefore, the government proposes an incentive to municipalities for the development of detailed plans that enable new construction of detached houses.

The Government has tasked Boverket with producing a basis for increased detached house construction. Boverket's assignment includes reporting where there is buildable land for detached houses. It also includes describing where detached houses of different types are built, which companies are responsible for the construction, and to what extent municipalities grant plots for detached house construction.

The government has also tasked Boverket with investigating possible relaxations of building requirements for student housing. The purpose of the assignment is to investigate the possibilities of significantly reducing costs in the construction of student housing and enabling an increased and more differentiated supply in the short and long term.

The Government is closely following the developments within the construction and housing sector and does not rule out that further measures may be taken.

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Patrik Björck (S)

Madam Speaker! Thank you for the answer, Andreas Carlson!

We have a crisis today in construction and in the timber industry. Strong measures are required from the government to save jobs and the economy and, not least, to satisfy the need for housing. The housing shortage does not only create personal tragedies but also risks hindering development in many parts of the country where investments in industrial development require housing.

For the period January to September 2023, layoffs within the timber industry have risen by 400 percent compared to the same period the previous year. One must go far back to find corresponding layoff figures. This hits the countryside particularly hard. A large part of the timber industry is located near the forest raw materials in smaller towns, and there the timber industry is often the largest employer.

The timber industry is important for Sweden. We need to increase housing construction to develop Sweden. The need for new housing is great. Building in wood does not only provide more housing and more jobs in the construction sector – it also benefits the environment. But due to the government's paralysis of action, many jobs are now being lost.

Despite the ongoing construction crisis and the historically low demand for new housing, the government refuses to do anything. The production of new housing has more than halved in two years. During 2021, when we had a Social Democratic-led government, 66,000 homes were started. During the first half of the year with the government that Andreas Carlson is part of, only 14,500 homes were started. This hits the timber industry hard. Reduced construction means reduced demand for modular houses, building materials, doors, windows, floors, kitchens, etc.

The background to my questions to Andreas Carlson concerns jobs, housing, the timber industry, the construction industry and, not least, the countryside.

The answer to the first question regarding when the Minister and the Government intend to implement measures to increase construction and save the wood industry, which is so important for Sweden and the countryside, is very worrying, Madam Speaker. The answer is that the Government is following the issue closely and does not rule out that measures may be taken. This unfortunately aligns with the Finance Minister's statement that the Government does not intend to act until the crisis becomes worse.

The second question regarding what measures the Council of State and the government plan to take then becomes impossible to answer. There are no such measures. Instead, Andreas Carlson mentions tax deductions and reviewing the availability of planned land, but that was not an answer to what measures are planned. It becomes a bit absurd, Madam Speaker, when Andreas Carlson himself states here in the chamber that the reason why the demand for housing is decreasing is a troublesome economic situation where housing construction is declining as a result of high inflation and rapidly rising interest rates which contribute to high production and financing costs. In that case, completely different measures are required from the government.

These answers are not sufficient. The question of housing construction and the Swedish timber industry is too important to be neglected. Jobs, housing, the timber industry, the construction industry, and not least the countryside require much more, Madam Speaker. They require an active policy. They require a government that is capable of governing and understands what it means to govern.

Madam Speaker! I want to appeal to Andreas Carlson to make a new attempt. He said in his answer that he has been out and met representatives of the timber house industry and timber house manufacturers. I wonder if Andreas Carlson got the picture of the extremely tough situation and if he is aware that the answers given to the interpellation on this very pressing issue will not alleviate the anxiety that exists in the entire timber industry.

(Applause)

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Mikael Eskilandersson (SD)

Madam Speaker! After 17 years of working for a subcontractor to Södra Skogsägarna, I am pleased that the timber industry is being highlighted in particular. I see myself as still working within the timber industry even though I am currently a member of the Riksdag. My connection to the forest and the timber industry today is perhaps above all my own forest and my own little hobby sawmill.

The timber industry is obviously affected by the decline in the construction market. However, perhaps one should be a bit careful about using doom-laden expressions, such as Member of Parliament Patrik Björck, who expresses it as if the Minister needs to save the timber industry.

The timber industry wants, like so many other industries, long-term and good conditions for its operations. There is no difference compared to other industries. What is specific to timber is that the forest is climate-smart. What we produce in the forest can help bind carbon dioxide while simultaneously providing added value for both the surroundings and nature.

The Swedish forest industry rarely receives enough positive attention in relation to what it actually contributes. The forest is at the same time so much more than just timber for house construction. Saving the forest industry from a potential recession can indeed sound laudable. However, I wonder how knowledgeable member Patrik Björck actually is.

For a long time, the demand has been very high for practically everything produced in the forest. Energy wood has also driven up the price, as it competes with pulpwood. Upon a quick check today, the timber price was closer to 1,000 kronor per cubic meter, and the pulpwood cost over 500 kronor per cubic meter. This was in my home market in Skåne. There is no purchase ban at the moment.

In October, Dagens industri conducted a global analysis where it was predicted that demand will increase in the future. Even though it currently looks quite - to not say much - bleak on the Swedish market for housing, it is temporary. At the same time, wood and forest products are in many ways the future, and more and more people are demanding the environmentally friendly properties that the forest industry has.

Overall, the forest industry in Sweden is therefore a strong future industry. The important thing now is not to do the wrong things but to ensure that a stable foundation is built with good conditions for our Swedish wood industry so that the wood industry here can highlight its advantages and thus compete with equal conditions as in other countries.

High diesel prices and unfair regulations that create disadvantages against other industries and the competing activities of other countries must, of course, be addressed. It is pleasing that our government has removed the excessive reduction obligation in order to instead follow the development in other countries.

It is also good that one simplifies for companies to compete with environmental labels and self-chosen consideration rather than forcing divestments for environmental consideration on them. The best society is achieved if we go hand in hand with industry and if the parties do not work against each other's environmental work.

But what do the Socialdemokraterna actually mean by that the timber industry needs to be saved?

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Niklas Sigvardsson (S)

Madam Speaker! I would like to begin by thanking Member Patrik Björck for raising an extremely important issue.

In my speech, I intend to focus on my home county and the timber house industry that exists there. In Jönköpings län and its surroundings, there is a large share of Sweden's industrial timber house production. It is an industry that employs many people in Småland and that delivers climate-smart homes to our entire country. According to Träcentrum in Nässjö, 75 percent of the country's total timber companies – ranging from carpentry shops, timber house manufacturers, and furniture and interior companies to sawmills – are located within a 15-mile radius of the highlands and Nässjö.

As has been described here, the economic situation is tough. Higher interest rates and high inflation have created a tough economic situation for Swedish households, which in turn means a dramatically reduced demand for detached houses.

The timber house companies have been forced to let staff go. According to the industry organization Trä- och möbelföretagen, more than 10 percent of the employees have been given notice or been dismissed. In August, the news came that a timber house company from Småland had gone bankrupt. In September, it continued with notice after notice. OBOS chose to give notice to 50 employees. It continued in October.

As late as last week - just before Christmas - Forsheda Hus laid off two-thirds of its workforce. This occurred only a few weeks after the Minister for Housing himself had visited the county and spoken with the timber house companies, which are crying out for help. He saw desolate production premises that stood empty due to lack of demand.

I hope that the minister takes with him the lessons that he must have drawn from this visit. Unfortunately, the lessons do not seem to be particularly great.

The timber industry and its subcontractors are extremely important employers for us in Jönköping County, and the dramatic decline in demand therefore hits the county extra hard. The Minister's response is almost nonchalant. It is empty. There is nothing that will make things easier for the companies that are currently struggling hard to keep their heads above water and are fighting to survive. That is actually how the situation looks in the small house industry in Jönköping County. Coming up with an increased deduction for renovation, which might contribute on the margin, when the government has consistently cut back on state investments that enable housing construction, is nonchalant.

Region Jönköpings län is actually leading the way, because there the Social Democratic regional leadership is acting and appointing support measures to stimulate the timber house industry. The region understands that something needs to be done. One wonders when Sweden's housing minister realizes the same.

I want to ask Housing Minister Andreas Carlson: When will the real and powerful support measures be in place for the Swedish timber house industry and for the timber house companies operating in Jönköping County?

(Applause)

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Leif Nysmed (S)

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

Before I address the Minister for Housing, I want to turn to the representatives of the Sweden Democrats, who wondered what needs to be saved in the timber industry. SD does not see the bankruptcies. SD does not see the layoffs. SD does not see the sharply increased unemployment. It is a clear sign that they are totally blind.

Now I intend to address the representative for the government, whom I hope is still in office.

We have discussed the number of housing units built previously. An important part of this is that the timber industry needs to come forward. One of the reasons why we did not reach even higher was that there was a shortage of concrete frames. Here we have an industry that should be a much more important part than it is and which has actually grown over the years.

Let us continue to develop our own timber industry so that it can become a key to increasing housing construction as much as is needed! Do not let the skills shortage become an obstacle for future housing construction now that people are being forced to leave the industry! We do not know where they are going, and we do not know how quickly we can get them back to get the wheels moving again.

I am a bit concerned when I hear that we must go even further down into the total housing crash before the government chooses to act. How many thousands must become unemployed? How many thousands must leave the industry for the government to wake up and see the gravity of the situation?

The government writes that several measures are being taken to mitigate the effects in the construction sector. We have previously discussed the rotavdrag (deductible for home improvements). I still maintain that it will not have any significant effect. Furthermore, it is too late, as it will not arrive until the summer. Several companies working in the rot sector are laying off people now – they cannot wait until this summer for measures. The crisis will also not be over in January 2025. It is both misguided, too late, and too short.

You highlight increased construction of detached houses. It is good that you do so, because there are many people requesting this. But why favor only one type of construction? The timber industry also builds multi-family houses. They also furnish them with furniture and have interior details such as windows, doors, and floors, which several have already rattled off. The timber industry is not just the construction of detached houses, but it is so much more.

Student housing is also mentioned. Read the report that Caroline Szyber, former KD's housing policy spokesperson, presented with the student housing companies and student unions where they request an investment support for student housing. It is a common request from them to provide housing that people can afford.

Why do you not listen to those who are affected and need this instead of removing requirements and risking building poorer housing?

It is not enough to follow the developments closely. One must act, and do so before the crisis has become too deep.

(Applause)

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Statsrådet Andreas Carlson (KD)

Madam Speaker! I thank you for the commitment. It is a very tough situation for the timber house industry. I have myself seen what Member Sigvardsson was referring to, and it is of course dramatic for those who are affected. It is a tough situation also in a situation where more housing needs to be built in Sweden because there is a housing shortage.

Seven out of ten want to live in detached houses, but it is very true that the timber house industry is not just about detached houses. I have not claimed that either, Leif Nysmed. I took up student housing in my interpellation answer, for example.

The various contributions in the debate have dealt quite little with inflation, but one cannot escape the fact that inflation has driven up both financing costs and production costs. To have a responsible policy in this situation that is weakly contractionary and which aims to ensure that fiscal policy does not counteract monetary policy is the path the government has chosen. I think that inflation deserves to be mentioned, and I do not believe that the members in the chamber have any major objections to that because they surely very well understand that inflation combined with the recession are global factors that hit construction very hard, and not least the timber house industry we are now debating.

Have I grasped the picture? Yes, I have. That there is a great understanding that inflation and the recession affect the timber house industry is something I have encountered when I meet those who are affected. There are simply no shortcuts to take here. I do, however, say in the interpellation response to Patrik Björck that the government is, of course, prepared to take measures. But it must not counteract the fight against inflation, because then the timber house industry and everyone who works there will be in an even worse position. We must therefore succeed in jointly keeping inflation down. We see that it is partially moving in the right direction, but it is too early to blow the danger over. It is therefore a matter of holding on and holding out.

I understand that this is a harsh message to those who have just been told that they have lost their jobs and to the companies that have gone bankrupt. But if we do not maintain the fight against inflation, it will become even worse and more difficult.

The government is following this closely and is prepared to take measures. We have taken an important measure with the increase in the deduction for renovation, and it also affects the subcontractors highlighted here, namely producers of windows, doors, and floors. It is a cyclically correct measure, and it will save some jobs in the sector. That is why we have introduced it. The government is prepared to implement measures, and the measures we are planning also concern structural reforms that are important and long-term. Obviously, we would have been better equipped if they had already been in place.

In the next round, it would be interesting to hear the members elaborate on how they view the fight against inflation and the risk that the situation will become even worse if we do not succeed with this important task.

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Patrik Björck (S)

Madam Speaker! I agree with Andreas Carlson that it is important to fight inflation, but let me remind you of an old saying: The operation was successful, but the patient died. One must be able to handle a difficult economic situation with inflation and at the same time ensure that an important industry in Sweden is not wiped out. This industry is not only important because it keeps companies and jobs running, but it fulfills a fundamental human need because it creates the opportunity for people to live, the opportunity for young people to move out of home, and the opportunity for the whole country to grow. It is not just about saving an industry but also about meeting a need.

Madam Speaker! Andreas Carlson says that he has taken note of the seriousness of the situation but comes to the chamber without any actual proposals. He cannot seriously mean that a review of the planning work or an increased tax deduction would handle the concerns that the timber house industry faces. Just as the Finance Minister implies, Andreas Carlson suggests that more measures could come when the situation worsens, when the crisis grows, and when more companies have gone bankrupt. The message is not only harsh—which one may need to convey as a politician sometimes—but also quite poor, irrational, and dangerous because we end up in a situation where there is not much left to save when we have lost the important function of building housing to promote industrial development around the country and the private situation of individual people.

I am completely convinced that the companies that Andreas Carlson is traveling around and meeting are not satisfied with the government's measures. I am convinced that they understand that inflation is a problem, but I am also convinced that they demand that the government address serious problems. Simply stating that the problem is serious and sitting down and twiddling one's thumbs is not responsible government work.

Other issues are unfortunately exacerbated by the lack of measures regarding the timber house industry. Niklas Sigvardsson has described vividly how it affects, for example, Jönköping County when companies go bankrupt and people are forced into unemployment. This also applies to other parts of the country. Leif Nysmed touched upon the problem with skills supply. It is not just about an important industry and a large social need, but it also wipes out a generation of construction workers and timber industry workers if they cannot remain in the industry.

The labor market parties in this industry, GS-facket and TMF, have requested that the government activate the short-term support. If there is no policy to maintain the industrial production itself, one could at least over time manage the supply of skills by ensuring that large-scale layoffs are avoided in this important industry. Is the government prepared to activate the short-term support, as the labor market parties request?

(Applause)

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Mikael Eskilandersson (SD)

Madam Speaker! I will begin by trying to explain to Member Leif Nysmed what the difference is between the timber house industry and the timber industry, because he accused my party of not seeing the bankruptcies and the defaults. The bankruptcies and the defaults exist within the timber house industry. But the timber industry, which the Social Democrats point out in their interpellation, is so much more than the timber house industry, and several parts of the timber industry are still running at high pressure. Demand has previously been almost overheated in many areas, and some may even think it is a bit nice that it has calmed down and that the demand is not as large as it has been.

With this said, it is clear that the timber house industry is severely affected, as we have practically no construction at all. But I still wonder: If the Social Democrats' subsidies and investment support were to strike back in the form of higher interest rates, what would that do to the timber house industry? It would put the timber house industry in an even worse situation than the one it is in today.

I actually think that what the government is doing by stimulating plans for where land is lacking is completely the right way to go. I know that in Helsingborg Municipality alone, thousands of people are standing in a lot queue to build small houses. If we can produce a few more lots than before, then more people can get the opportunity to build their own small house, and they do not need to stand in queue and wait as long as they do today.

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Niklas Sigvardsson (S)

Madam Speaker! The Minister for Housing continues to return to the measures that he must interpret as both powerful and responsible on the government's part. But the fact is that Region Jönköpings län alone does more to strengthen the timber house industry than the government does, and Region Jönköpings län thus contributes with 400,000 kronor. That says something about how poorly the government's policy is positioned.

The government is de facto helpless when the timber house industry stands at the brink of ruin, for that is how bad it is. One simply has to acknowledge how reality looks. Then the minister returns with the claim that regulatory simplifications for student housing shall save the timber house industry. That students shall have poorer accessibility and hardly any daylight, or that they shall endure even more noise, shall thus save the timber house industry. We can probably state that many more timber house companies will go bankrupt long before these regulatory simplifications begin to apply.

The Minister for Housing should perhaps take and call the chairman of the regional council in Jönköpings län, Rachel De Basso, and ask how to go about providing direct support to the timber house industry here and now. If Region Jönköpings län manages to prioritize the timber house industry in tough economic times, the government should actually be able to do the same. For all companies in the timber house industry in and around Jönköpings län, the minister can well try to act as December and the upcoming Christmas offer, that is, to see to it that they are extra kind and give the companies what they need.

(Applause)

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Leif Nysmed (S)

Madam Speaker! I note that both the government and SD believe that more people in the Swedish workforce should have to become unemployed because we must bring down inflation and that Swedish companies need to go bankrupt on a larger scale before we can take any measures. They are, therefore, to be affected by the global factors that the minister mentions in his answer, such as increased fuel and energy prices from abroad. That is supposedly to be the reason why we increase unemployment and put companies into bankruptcy. It is unreasonable, I think.

I think the crisis is so deep now that we must also be able to maintain an active economic policy in order to save the jobs and the companies and to be able to quickly transition and get started with the construction again.

Pushing the need forward is what is being done now. The need is growing and becoming even larger. It does not solve the problem. Because what happens the day the wheels start turning again and we have to build to keep up with the need? Today, it is 67,000 housing units that are needed, but when we push the need forward, it grows. Soon the need is 100,000 a year. What happens then? Is the staff still there? Do we need to hunt for staff?

What happens when there is a shortage of staff? Well, it leads to increased costs because you need to raise wages. What happens when there is a shortage of materials to build 100,000 homes a year? Then prices rise. This is exactly what has been pushed forward. The problem has not been solved. It has only been passed on to future generations. It is not sufficient.

(Applause)

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Statsrådet Andreas Carlson (KD)

Madam Speaker! I would like to begin with Niklas Sigvardsson's question.

I think it is positive that Region Jönköpings län has made a decision regarding support for the timber house industry for the manufacture of emergency houses for crisis-affected areas. This is indeed what the support is about. Let me remind you of what the government is doing for just crisis-affected areas.

We have a very large task ahead of us in the work of rebuilding Ukraine. Ukraine's president has, here in the chamber via link, highlighted the Swedish timber industry and architecture. In the contacts I have had with representatives of the Ukrainian government, I have also highlighted the potential that exists in the Swedish timber house industry. There is great interest in building sustainably for a flourishing future for Ukraine and for the people of Ukraine.

This stands high on the government's agenda. The support measures and support packages that the government has decided on concern both military support and humanitarian support. This will be needed for a long time to come, also in the work to rebuild Ukraine.

Here I have taken several different initiatives both to strengthen the transport infrastructure and build it up, but also to build up Ukraine with the innovation and the power that exists in Swedish expertise. We have a recognized expertise when it comes to building sustainably and planning societies. From Ukraine's side, they are not only interested in rebuilding the country as it was but also in building for the future.

There is a very great potential here for the timber house industry. Several companies are already involved, and the government is working to see what opportunities exist. We have announced that Business Sweden shall open an office in Kyiv, to take one example. It is about providing assistance and helping in solidarity with Ukraine, with the people of Ukraine and with other areas in distress, but it can also, understandably, mean job opportunities in the Swedish timber house industry.

There we have a common interest. This is something that will require a commitment for decades to come, and it is something that the government prioritizes.

But the development in the construction and housing sector is greatly affected by inflation. I thank for the contributions that also underlined this in the second round. It also illustrates that there is no quick-fix solution that solves both inflation and the economy, but one must stick to the fight against inflation to ensure that the measures one takes do not contribute to making the situation even worse.

Stimulating plans for buildable land and mapping buildable land is one of the most important structural factors when it comes to increasing wooden house construction. I also said that we do not rule out that further measures can be taken.

A member mentioned support for short-time work. Short-time work means that an employee reduces their working hours for a limited period, while the employer receives financial support from the state for the cost of the short-time work.

When the government holds the line on fighting inflation and if we succeed with that, other tools will be available if the economy gets stuck. I do not rule out different measures here. As I said in my answer, further measures may be taken, but we must succeed in keeping inflation down.

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Patrik Björck (S)

Madam Speaker! That last part was a bit murky. Was it a yes or a no to activating the short-term support? Andreas Carlson has the opportunity to return to that. We haven't actually received any answers to the other questions, but Andreas Carlson is welcome to elaborate on the last one.

The government has not developed, but rather abolished the investment support and talked about simplifying regulations. There were 40,000 apartments in the queue when the government cut the investment support, and that will have serious consequences since, as it turns out, one cannot live in a simplification of regulations.

The government stands by and watches while the construction industry and the timber industry crash. I can tell the Member of Parliament from SD that the timber industry is much more than wooden houses. Also furniture, doors, windows and all sorts of things are dragged down when the construction industry crashes.

Then job seekers will lose their jobs and companies will go bankrupt. That is the bitter truth. But Sweden deserves better, Madam Speaker. We Social Democrats have proposals for a different policy. There is an opportunity to speed up housing construction if one pursues an active policy instead of sitting and watching and hoping that everything will improve on its own.

It is about, for example, state construction loans, co-financing for new production, and state construction stimulus in the form of a production subsidy aimed at smaller towns with large industrial establishments and for youth and student housing.

We are talking about starter loans for first-time buyers. To give all people the opportunity to buy a home, we Social Democrats propose a starter loan. This would stimulate demand and contribute to increased construction.

What is so important with this debate is to see that there are differences in the policies. We Social Democrats have alternatives and concrete measures, while the government and the Minister for Housing sit and hope that everything will get better. One uses the Riksbank as an SMHI and sees if the inflation expectations will decrease or increase.

We Social Democrats have a workshop, we have politics and we have measures.

(Applause)

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Statsrådet Andreas Carlson (KD)

Madam Speaker! Imagine if Patrik Björck's government had had the workshop during the eight years when there was a chance to do something about the structural problems that exist and have existed for a long time on the housing market.

Think if the lead times had been shortened, if the regulations had been simplified, and if buildable land had been made available in attractive locations so that the situation for the small house industry and small house construction had been better equipped.

Imagine if we had not constantly prioritized the fact that seven out of ten want to live in detached houses over reforms, such as those we are now about to launch. It is clear that it takes some time when it was a blank slate regarding specifically building detached houses, to map out buildable land and to ensure that one can live in attractive locations in Sweden.

And then we have the lead times, which perhaps did not cost so much when money was free, during the time when Patrik Björck's government ruled, but which are now felt extra hard among those households that today are both under severe pressure and cannot invest, but also in the financing and production costs that have skyrocketed.

It is pleasing that the Social Democrats have a workshop now, but it would have been better if they had had a workshop significantly earlier than that, Madam Speaker.

We are not sitting around twiddling our thumbs. We have many investigations underway. We will return to the chamber with the reforms that are needed. As I have also said, we do not rule out that further measures may need to be taken. It is obvious that the situation is tough. But we must hold out and fight inflation, because it is that which is the root of much of the evil that is currently hitting hard, not least within the timber industry, which the interpellation concerns.

I thank you very much for the debate.

The interpellation debate was hereby concluded.

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