Skip to main content

Russia’s construction industry will continue to struggle

Published by
World Cement,


The construction industry in Russia contracted by 7.5% in 2015, and will continue to struggle due to the deteriorating business environment, currency depreciation, Western sanctions, a lack of foreign capital investment and a decline in oil price.

According to Timetric’s Construction Intelligence Center (CIC), the industry’s output value declined from US$197.3 billion in 2014 to US$182.5 billion in 2015 (measured at constant prices and at 2010 US dollar exchange rates). It is expected to contract further in 2016, by close to 1% - before steadily regaining some growth momentum. Timetric’s CIC forecasts the industry’s output value to rise at a compound annual growth rate (CAGR) of 2.52% over the forecast period (2016–2020); up from -2.19% during the review period (2011–2015).

The industry will be supported by investment related to the Socio-Economic Development 2020 program, under which the government aims to develop the country’s road, housing, rail, airport and other related infrastructure. Moreover, the upcoming Fifa World Cup 2018 will also be a source of activity. The event is expected to create opportunities for businesses, attracting investments in the leisure and hospitality buildings and retail buildings categories.

However, there are risks associated with the outlook for the construction industry in Russia over the forecast period. Notably, a continuation of Western sanctions and low oil prices will greatly undermine growth prospects over the next couple of years. The country generates 70% of its total export earnings from the oil and gas sector.


Adapted from press release by Joseph Green

Read the article online at: https://www.worldcement.com/europe-cis/22022016/russia-construction-industry-continue-struggle-543/

You might also like

 

 WCT2021

WCT2021

At WCT2021 you will hear from a range of industry leaders and technical experts as they discuss the key challenges facing the cement industry and the latest solutions on offer. Register for free today »

 

Hanson shares 2021 Sustainability Report

Hanson’s 2021 sustainability report highlights the company’s 2030 commitments and the progress made during the 2020 calendar year, despite the unprecedented challenges brought about by COVID-19.

 
 

Embed article link: (copy the HTML code below):