Builder Skanska says rising rates, costs dim outlook in Europe

SWEDISH builder Skanska on Wednesday (Oct 26) reported a bigger-than-expected third-quarter profit and lowered its 12-month market outlooks for construction in Eastern Europe and residential developments in Europe.

Skanska, one of the biggest builders in the United States, said that the building segment outlook is slightly more cautious due to cost inflation and higher interest rates.

Those factors have also weakened consumer confidence, hurting the housing market, it added. As decision-making takes longer, the company expects all its markets to remain negatively affected for some time.

“Market activity has reduced significantly this year and sales have slowed as a result,” chief executive officer Anders Danielsson said in a statement.

Q3 order bookings in Skanska’s construction arm rose by 50 per cent from a year earlier and by 17.4 per cent versus the second quarter to 43.8 billion Swedish crowns (S$5.7 billion) adjusted for currency effects.

Operating profit at the Nordic region’s largest builder slipped to 1.52 billion crowns from 1.54 billion crowns a year earlier but topped the 1.31 billion crowns expected by five analysts polled by Refinitiv. REUTERS