Norway: Weak Performance in 2025, but First Signs of a Turnaround in 2026

by Marcel Dresse

The Norwegian construction sector experienced a weak performance in 2025, marked by declining completions and subdued overall investment. However, several forward-looking indicators point to the beginning of a trend reversal that is expected to materialise more clearly in 2026.
In residential building, permits for 2025 have now been fully published by Statistics Norway. Permits declined by -2.3% compared to the previous year. B+L had originally forecast a less pronounced decrease, indicating that the downturn in residential building was somewhat stronger than anticipated. Completions in residential building also showed a negative development in 2025, underlining the ongoing weakness in the sector.
At the same time, there are clear signs of stabilisation. Starts in residential buildings increased in 2025 by +4.2% compared to 2024. This growth suggests that the trough in residential building may have been reached and that a gradual recovery is underway. As construction starts typically lead completions with a time lag, this development points to improving output in 2026.
In non-residential building, permits developed positively in 2025, rising by +6.3%. This exceeded B+L’s autumn 2025 forecast of +4.3% growth. Despite this positive signal, completions in non-residential building remained negative in 2025. However, similar to the residential segment, construction starts also increased in the non-residential sector, indicating strengthening project pipelines.
Due to the weaker-than-expected performance in 2025, B+L revised its construction output data. As a result of the weak development in 2025, total investments in the construction of buildings and civil engineering declined by -1.0% in 2025. For 2026, however, B+L expects investments to return to growth, supported by rising construction starts and rising permits.
Key indicators from industry associations and official statistics confirm the subdued environment in 2025. The productivity index published by Statistics Norway was negative for both construction of buildings and civil engineering. The business climate survey released by NHO Byggenæringen shows a recent improvement compared to December 2025, but sentiment indicators remain in negative territory overall. Meanwhile, residential building costs increased by around 4.0% in 2025, roughly in line with consumer price inflation in Norway.
In summary, 2025 was another weak year for the Norwegian construction industry, characterised by declining completions and falling investments. Nevertheless, the increase in construction starts in both residential and non-residential building, combined with increasing permits in non-residential building, indicates the first signs of a turnaround. For 2026, rising completions and renewed growth in construction investments are expected by B+L. In addition, opportunities are emerging in the renovation segment, which may provide further stabilisation and growth potential for the sector.