(Bloomberg) -- Sweden’s worst slump in home construction in more than three decades is over for now, a gauge of housing starts in the largest Nordic nation suggests. 

An indicator from data provider Byggfakta published Wednesday was largely unchanged in March, signaling that activity in the sector is stabilizing following two years of sharp declines from August 2021. 

“The housing indicator is making it increasingly clear that construction starts have bottomed, and even recovered somewhat in the last six months,” Tor Borg, head of analysis at Byggfakta said in a statement. “It could be driven by developers that need to start projects that have been granted subsidies, or by a more positive rate outlook and stabilizing costs. Either way, the recovery so far is modest, from a very low level.”

While the indicator suggests that construction is increasing somewhat, the number of homes started remains far below what is required to meet demand. Authorities estimate a need to produce 67,300 housing units annually, and Byggfakta’s data suggests that the annual rate of new construction is about a third of that.

Non-residential construction starts, which peaked at historically high levels in late summer and have declined in recent months, posted a 1% increase in March from a year earlier, Borg said, citing an indicator. Still, it’s too early to determine whether the slowdown is over, he said.

Builders have been among the most visible groups in Swedish bankruptcy statistics over the past months, hit by higher raw materials costs and lower demand as inflation and higher borrowing costs sapped purchasing power.

(Updates with non-residential building starts in fifth, builder bankruptcies in sixth paragraph)

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