Finland's Construction Sector Faced With Serious Problems

According to yle, Russia's invasion of Ukraine has already impacted access to supplies of some key building materials, while higher energy prices are also boosting overall costs.

A large portion of imports of the steel used by the construction industry has stalled since the start of Russia's attack on Ukraine. And now, the entire Finnish construction industry is facing major problems due to material shortages.

According to the construction industry, an estimated quarter of the steel used in Finland has previously come from Russia, Ukraine and Belarus.

"Steel is used in all construction. Building starts with the pilings and if you get no offer to supply steel pilings for a building, the entire site may come to a halt," explains Juha Luhanka, Deputy Director of the Confederation of Finnish Construction Industries.

There is currently a severe shortage of steel throughout Europe.

The price of steel almost doubled during the coronavirus pandemic and now prices for some types of steel products is four times what it was a few years ago.

Betset is one of Finland's largest manufacturers of precast concrete elements. The company has eight plants and 650 employees around the country. Betset has enough steel in stock to last until next summer, but the company is already preparing for what happens after that.

According to Betset's Sales Director Jari Laajala, the company has already begun formal talks with employees' representatives that could lead to layoffs.

"If the availability of materials runs out, it will stop production. We aim to protect the company's financial situation," explains Laajala.

The Confederation of Finnish Construction Industries estimates that the stocks of various building materials in Finland will be sufficient until next summer, but after that major problems are expected. It is not yet known how bad the situation in the construction industry could become.

However, it is assumed that the crisis in the sector caused by the Russia's invasion of Ukraine will be deeper than the effects of the coronavirus pandemic.

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