New Market Report: Construction in Russia - Key Trends and Opportunities to 2018

From: Fast Market Research, Inc.
Published: Tue Aug 19 2014

The Russian construction industry recorded a review-period (2009-2013) compound annual growth rate (CAGR) of 12.81%. Growth was supported by private and public investments in infrastructure, residential and commercial construction projects. Considering the role of modern infrastructure in achieving long-term growth, the Russian government invested heavily in road and rail projects. Industry growth is expected to continue over the forecast period (2014-2018), as a result of the government's commitment to making infrastructural improvements and an anticipated recovery in the global economy. Consequently, industry output is expected to record a CAGR of 7.36% over the forecast period.

Report Highlights

* According to the Unified Interdepartmental Information and Statistical System, construction activity in Russia was fairly weak in 2013, with the industry's output posting a contraction of 1.6% in real terms. This followed respective annual real-term growth of 5.5% and 2.8% in 2011 and 2012. With a deteriorating business environment and capital outflow, due to conflict between Russia and Ukraine over control of the Crimean Peninsula, the construction industry's output is expected to remain weak over the forecast period.

Full Report Details at

* Infrastructure construction is expected to continue expanding over the forecast period, mainly driven by large-scale investment in the construction industry. Having already registered a boost from the construction of infrastructure facilities, as well as hosting the 2014 Winter Olympics, the nation's hosting of the 2018 Fifa World Cup will also require stadia, transport infrastructure, accommodation, hotels, airports and training bases. There are 11 host cities for the World Cup, indicating a broad demand for stadia, transport infrastructure and accommodation. According to the country's Ministry of Sport, RUB600.0 billion (US$19.1 billion) is required to be spent on various infrastructure construction projects in order to prepare for games.

* Significant investments are being made in the country's power sector to improve the energy quality, effectiveness, safety and security. The government introduced the Energy Strategy 2030 in 2009, under which electricity generation capacity will double from 225GWe in 2008 to 355-445GWe by 2030. A sum of RUB9.8 trillion (US$322.7 billion) will be spent on power plants by 2030, as well as RUB10.2 trillion (US$335.9 billion) on transmission.

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