EUR 177 million per year. This is the price that society ihas to pay because the Swedes choose to follow different building regulations than the Danes. The politicians are responsible, says Ole Norrback, Chairman of the Freedom of Movement Forum.
The number is based on an investigation of the economic consequences for the border barriers within the Nordic construction industry, conducted by SP Trätek on behalf of Nordic Innovation and the Freedom of Movement Forum.
The investigation shows that different building regulations in the Nordic countries each year cost approximately EUR 51 million for the new houses being built in Sweden. The biggest share consists of indirect costs and reduced competition as a result of the differencies. The same calculation can be made for the other Nordic countries, which gives the total amount of more than EUR 177 million per year.
- The study provides a concrete example of how much money that actually could be saved if the countries chose to coordinated laws and regulations, Ole Norrback says.
Border barriers in the construction industry as well as in other industries were discussed at a conference in Stockholm on November 30. The conference highlighted the untapped potential of Nordic cooperation, focusing on differences in regulations that inhibit the potential for growth.
Consumers paying the bill
The construction industry consitutes an essential part of the Nordic economies. But the national building regulations also serves as border barriers in the collaboration between the countries. One example is the different regulations for wooden houses, which make it difficult to export houses to the other Nordic countries. Small differences may have great implications on acquisition, construction and manufacturing. The extra materials and work required can affect living costs – and in the end it is the consumers who must pay the bill.
- The differences inhibit competition in the way that they make companies hesitate to go to another market, says Norrback.
Freedom of Movement Forum and Nordic Innovation strive to eliminate border barriers in the construction industry. It is especially important to avoid new barriers being created. Therefore the Nordic countries should cooperate when implementing national and EU building regulations in the future, and with that set a Nordic standard for the rest of Europe.
By coordinating the Nordic construction industry, companies can more easily reach out to a broader market and thus have the possibility of greater profitability and development of new innovative and competitive products.
- For this to become reality it requires a political liability. First of all, each individual country must take the other countries into account when introducing new laws and regulations, stresses Norrback.
According to Housing Statistics in the European Union in 2010, 24.000 new houses were built in Sweden in 2009, 22.000 in Finland and 15.000 in Denmark. Data gathered by Nordic Innovation shows that in 2010 21.000 new houses were produced in Norway and 1137 in Iceland. The investigation of SP Trätek shows that the additional costs due to regulatory differences are in average EUR 2135 for each new house.