On Monday evening the Byggnads union rejected an offer from the mediation agency, saying it was "empty," and on Tuesday afternoon the employers' association BI gave notice of a lock-out, to come into effect on 22 April, say mediators to Swedish Radio. A lockout would affect some 12,000 employees.
If employers and unions fail to come to an agreement the dispute could escalate further over the coming weeks.
The two sides are deeply divided, with employers wanting to offer a pay rise of 2.2 percent and bring in a comprehensive pay framework. It says this is fair because it reflects the pay deal already agreed on by the industrial unions.
The union, Byggnads, says the current piece-work pay system (ackordslön) gives them much more influence at work, and counts as part of the "Swedish model." They are also part of a group of unions who reject the 2.2 percent benchmark for pay rises, and say the current state of the Swedish economy justifies a rise of 3.2 percent.
Sweden's collective bargaining agreements, which give workplace rights in return for a promise not to strike, have expired and negotiations are taking place across all sectors of the economy.
On Tuesday, a strike also began on the ferries that service the archipelago islands outside Stockholm and Gothenburg. That disagreement is also over the pay system. In addition, a painters' strike is also already underway.