Recovery for Russian equipment market

Sales of construction equipment in Russia are expected to recover within the next 12 months according to the latest report from PMR Publications.

The market research organisation, that specialises in studies of Central and Eastern Europe, predicts in its ‘Russian building machinery market may recover in 2010' report that following a -15% decline in 2009, sales of construction equipment will bounce back in 2010.

The positive outlook is attributed to the government's stimulus package, major infrastructure projects and energy investment.

"Construction demand in 2010 will be buoyed by the RUB 440 billion (€ 9,7 billion) designated by the government to support residential construction this year," said a PMR Spokesman.

"There are also big projects with secure financing, including the Winter Olympic Games in Sochi, the APEC 2012 Summit in Vladivostok and the government's road construction programme, which will all need machinery," he said.

The report said that up to 50% of equipment currently being used by Russian contractors is worn out, and this too will help to drive sales in 2010 as machines are replaced out of need.

According to the report, demand is going to be price driven. "The consumer focus on lower prices is advantageous to Russia's domestic manufacturers and Chinese exporters," said the spokesman. "World class equipment manufacturers will need to decrease their prices and those who managed to build assembly facilities in Russia, such as Caterpillar, will gain a strong advantage."