According to GlobalData, following negative growth in 2017, construction activities in Russia picked up sharply in 2018, contributed to by the country beginning work in preparation for hosting the 2018 FIFA World Cup. As a result, the country’s construction industry grew by 4.7% in real terms in 2018, compared to -1.2% in 2017.
The report, ‘Construction in Russia – Key Trends and Opportunities to 2023’, notes that the Russian government invested RUB904.6 billion (US$14 billion) on the development of hotels, transport facilities, and other related infrastructure in 11 cities of the country to host the 2018 FIFA World Cup.
“In 2018, Russia’s GDP grew by 2.3% in real terms, following two years of weak performance,” said Danny Richards, Lead Economist at GlobalData. “This growth was supported by improving domestic demand and investment flows, as well as investment on energy, transport, and commercial projects in the wake of the FIFA World Cup 2018.”
Energy and utilities accounted for 21.7% of Russia’s construction industry’s total output in 2018, followed by infrastructure projects (19.1%), commercial construction (10.5%), industrial work (7.2%), and institutional projects (2.3%).
According to Russian Government estimates, transport infrastructure spending in the country is expected to reach RUB56.5 trillion (US$969.0 billion) by 2030. Additionally, a gradual improvement in consumer and investor in consumer and investor confidence is expected to drive private sector investment in construction projects in the coming years.
Richards continues, “According to the Federal State Statistics Service (Rosstat), fixed capital investment in the country rose by 10.2% in 2018, increasing from RUB16 trillion (US$274.2 billion) in 2017 to RUB17.6 trillion (US$279.5 billion). During the first five months of 2019, it grew by 14.5%, compared to the same period of 2018, going from RUB2.3 trillion (US$36.5 billion) in January – May 2018 to RUB2.6 trillion (US$40.2 billion) in January – May 2019.
“In real terms, the industry’s output value is expected to post a forecast-period CAGR of 2.54%, to value US$217.6 billion in 2023, measured at constant 2017 US dollar exchange rates. However, downside risks to the forecast remain pertinent – the economy is vulnerable to fluctuations in oil prices, and western sanctions are expected to remain in place for some time.”
Read the article online at: https://www.worldcement.com/europe-cis/24092019/fifa-world-cup-scores-for-russias-construction-industry/