Scenario-Based Analysis of the Ukraine War’s Impact on Finland’s Construction Sector
Client
The Confederation of Finnish Construction Industries (CFCI)Client Overview:
The Finnish construction industry has faced significant challenges in recent years due to general economic uncertainty and slow market development in Finland. This market downturn has been largely triggered by Russia’s aggression against Ukraine, which began in early 2022.
In the early stages of the war, our client, The Confederation of Finnish Construction Industries (CFCI), commissioned a study to explore several high-level scenarios regarding how the conflict might evolve and affect the Finnish construction sector. As the war persists, CFCI decided to conduct an updated study in collaboration with Civitta to cover main scenarios and their impact on the Finnish construction industry.
Challenge:
The objective of the project was to identify and outline potential scenarios for how the situation in Ukraine might evolve in the upcoming years and analyse the implications of each scenario for the Finnish construction sector.
The main focus of the impact assessment was on the effects of the peace-and-rebuild scenario in Ukraine, as it was identified as the most relevant scenario for understanding its strategic implications for operators in the Finnish construction sector.
Our Approach:
- The first part of the project focused on assessing performance of the Finnish construction sector in recent years. Additional insights into the sector’s historical development were gathered through interviews with approximately 10 CFCI member companies from different segments of the construction value chain.
- Developing potential scenarios for the war in Ukraine was the main objective of the second part of the project. First, our team identified key strategic macro-level drivers (dynamics of the war, foreign aid flows, and security guarantees) and analysed their potential future developments. These drivers formed the basis for outlining 4 relevant scenarios for how the situation in and around Ukraine may evolve.
- The final part of the project involved assessing the impact of different scenarios on central supply factors (raw materials, labour force) and demand (local & regional demand, opportunity size in Ukraine), and outlining their strategic implications for the Finnish construction industry. These insights were subsequently discussed and validated in a workshop organized for CFCI members.
Services Provided:
- Analysis of the impacts of the Russian invasion in Ukraine on the Finnish construction sector by evaluating historical data on various indicators, including output, profitability, raw material prices, imports and employment
- Identification of realistic development scenarios for the situation in Ukraine and clarification of the key drivers behind the potential outcomes
- Identification of key supply- and demand-side drivers through which the Ukraine scenarios could affect Finnish construction sector
- Provision of insights on the magnitude and direction of impacts that the different identified scenarios would have on key construction sector supply and demand drivers in Finland
Results & Impact:
The project delivered a comprehensive and actionable strategic report outlining how different Ukraine war scenarios could impact the Finnish construction sector. By mapping out key supply- and demand-side effects under each scenario, the study provided clear, evidence-based insights into potential risks and opportunities.
The findings have equipped Finnish construction companies via the Confederation of Finnish Construction Industries (CFCI) – with a robust decision-making framework. This enables industry leaders to better anticipate future developments, adapt their strategies accordingly, and enhance resilience in the face of continued geopolitical uncertainty.
The impact of the project extends beyond strategic awareness: it has directly contributed to more informed scenario planning and risk management practices within the sector.
Key Takeaways:
- Structured scenario development: Civitta’s ability to define and analyze key macro-level drivers led to credible and realistic future scenarios.
- Strategic impact assessment: Civitta connected high-level geopolitical developments with sector-specific supply and demand factors, offering actionable insights.
- Facilitated informed decision-making: The comprehensive report and validation workshop empowered CFCI members with data-driven tools to guide their strategic planning in an unstable global environment.
