Market Research Report
Construction in Russia - Key Trends and Opportunities to 2024
|Published by||GlobalData||Product code||960775|
Delivery time: 1-2 business days
|Construction in Russia - Key Trends and Opportunities to 2024|
|Published: August 21, 2020||Content info:||
Russia's construction industry has been severely affected by disruption caused by the COVID-19 pandemic. In the short term, construction activities in the country will be impacted by the restrictions imposed by the government to contain the spread of the disease. Downside risks for the construction industry not only include the worsening of the outbreak, but also declining oil prices. Major public-funded construction projects could be delayed or cancelled, as government revenues in the coming months will be affected by the fall in oil prices.
The strict lockdown measures imposed by the government to contain the spread of the virus have had negative economic and fiscal consequences. According to the Ministry of Finance, the federal budget deficit increased to RUB955.9 billion (US$14 billion) in the first half of 2020, compared to a surplus of RUB1.7 trillion (US$25.8 billion) in the same period in 2019.
Construction has been severely affected since the start of the virus outbreak; construction projects reportedly being delayed, and workers are being made redundant. While 42.2% of the mega infrastructure projects in the pipeline are in the execution stage, the prospects for progressing with the construction activities remain uncertain, as the country's fiscal position will be weakened by government's expansionary fiscal policy stance and the reduction in oil and gas revenues. In mid-May, the Russian finance minister, Anton Siluanov, said that the country's revenues from oil and gas will be RUB3 trillion (US$39.5 billion) lower than previous estimates, due to weaker oil prices. However, the government plans to use reserves from the National Wealth Fund to finance its budget deficit. Prior to the COVID-19 crisis, the government had outlined plans last year to spend RUB6.3 trillion (US$96 billion) on the development of the country's transport infrastructure during the period of 2019-2024.
Reflecting the disruptions caused by the pandemic, coupled with the weak outlook for economic growth, GlobalData forecasts the construction industry to shrink by 4.2% in 2020. The industry will recover, however, posting an average annual growth of 2.6% between 2021-2024
This report provides detailed market analysis, information and insights into the Russian construction industry, including -
This report provides a comprehensive analysis of the construction industry in Russia. It provides -