Swedish study on the effects of limiting the number of subcontractor tiers to two

In September 2025, the Confederation of Swedish Enterprise has published a report on the effects of limiting the number of subcontractor tiers to two in the construction sector. Based on interviews with industry representatives and statistical analysis from Sweden and the EU, the report highlights how such a restriction could lead to significantly increased activity costs, reduced productivity, and weakened competitiveness. The study is based on economic reasoning.

Some of the conclusions/recommendations illustrated in the study include:

• Subcontracting leads to more efficient use of machinery and labour, greater flexibility, economies of scale, reduced risk of project delays, enhanced competition, higher productivity, and other positive outcomes;
• Avoiding the introduction of new restrictive legislation, as it might reduce growth;
• Flexibility to each Member State to address issues in a proportionate manner;
• No limitation on the number of subcontractor tiers, in order to foster competition, with a positive impact on labour and skills shortages;
• Strengthen enforcement to stop unscrupulous companies;
• Improving the capacity of sharing information within and between countries.

The full study is available here.