Icelandic construction firms face project shortage amid rising costs

Construction companies and designers in Iceland are experiencing a significant downturn, with an increasing number of firms seeking new projects. Páll Daníel Sigurðsson, CEO of the construction company Eykt, notes a rise in inquiries from designers and contractors looking for work.

"I find that more and more designers and contractors are contacting us who need projects," Sigurðsson told mbl.is. "Projects are stalling, and new projects are not starting for those building on their own account, so people are looking for work, and I don't have projects for designers or smaller contractors."

Sigurðsson's company, Eykt, is currently in a relatively good position, having recently started two interior projects. However, he acknowledges that this is due to luck rather than market conditions. Many companies that focused solely on building apartments are struggling with unsold inventory and high interest costs.

The Confederation of Icelandic Enterprise (SI) has reported a near tripling of defaults in the construction industry in the first half of the year, reaching 29.7 billion Icelandic króna, up from 9.3 billion at the end of last year. The SI is advocating for the Central Bank of Iceland to maintain current interest rates, despite inflation remaining above the bank's target, arguing that further rate hikes could excessively tighten the economy.

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I find that more and more designers and contractors are contacting us who need projects. Projects are stalling, and new projects are not starting for those building on their own account, so people are looking for work, and I don't have projects for designers or smaller contractors.