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Construction industry in Russia declines

September 11/2019
MOSCOW (MRC) -- Construction industry in Russia has been showing a decline, despite the active development of construction in the past few years, RBC reports.

The only driver of demand for housing (and the residential segment occupies an impressive share of the construction market - 30-50% depending on the region) remains a mortgage. And in order to stimulate buying activity, the Central Bank lowers the key rate, and after it, banks reduce interest on the mortgage. However, the number of loans issued nevertheless decreases - by 13.2% in six months.

The absence of more or less bright prospects in construction also affects the state of the building materials market. In this segment, a steady decline trend is also observed.

Active development of construction in the past few years was a result of major sporting events - the Olympics and the World Cup. Thanks to them, investments increased 3-4 times a year. Today, world sports are left behind. And despite the fact that development continues (they modernize the housing and communal services, repair houses and roads, build new infrastructure), there will be no and will not be a multiple increase in investment volumes and the pace of construction. At least until new equally global projects appear in Russia.

The Ministry of Economic Development hopes that investment growth rates in the second half of the year will reach 4-5%. In the meantime, they are only shrinking: the Central Bank of Russia estimated the fall in the second quarter at 1.3Ц1.8% compared to the same period last year. Today, investors are not ready to invest in either construction or the production of building materials, since the terms and prospects for the return on these investments are difficult to predict.

According to the MRC Annual Report, construction growth in the near future, according to experts, is not to be expected. The commissioning of housing in the country by 2024 will fall to 56Ц64 mln sq meters. m. But at the same time, in 2019, housing commissioning will grow by 5Ц7%, because in 2016Ц2017. There were no crisis situations and developers brought out new projects. The real downward trend associated with amendments to the shared law will appear at the end of 2020. In 2018, the demand for polyvinyl chloride from manufacturers of molded products was reduced by 10%, most of all the demand from panel manufacturers dipped - more than 18%.
Author:Anna Larionova
Tags:ABS, PVC, PP, PS, construction, Russia.
Category:General News
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