Strong forecast for Russian construction output

By Helen Wright28 January 2013

Growth in Russia's construction industry is expected to accelerate between now and 2015, mainly fuelled by state-funded civil engineering projects for the development of the country’s transport and heavy industry infrastructure.

According to research company PMR, high priorities will be regions with potential in natural resources – Siberia, Urals, and Far Eastern Federal Districts are expected to be major beneficiaries.

PMR said the Far Eastern Federal District was expected to have the fastest developing construction market of all federal districts over the next three years, with average construction output increases of +12.5% per year.

In the coming years, most construction projects will be implemented in the Republic of Sakha-Yakutia, which has had difficulty capitalising on its oil and gas reserves due to its underdeveloped transport infrastructure.

PMR said there were only 10 km of roads per 1,000 km² of territory in Far Eastern Federal District, and 6.7 km in Yakutia, significantly below the country's average of 64 km.

Strong growth is also forecast for the resource-rich Siberian Federal District, where the construction market is estimated to grow on average +11.3% annually. PMR said the highest growth was likely to be recorded in the non-residential construction segment, driven by industrial construction projects.

Meanwhile, the construction market in the Urals Federal District of Russia is dominated by civil engineering. PMR said the market would continue to expand largely on the construction of related infrastructure for the development of oil and gas fields in Tyumen Province.

However, PMR said less impressive growth rates would be recorded in Southern Federal District, where construction market output is expected to rise on average +2.3% during 2013 to 2015. This weak performance will come after a period of large-scale investments as part of preparations for the 2014 Sochi Olympics, which must to be completed by the end of 2013.

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