Russia Construction Market Size, Trends, and Forecasts by Sector - Commercial, Industrial, Infrastructure, Energy and Utilities, Institutional and Residential Market Analysis, 2024-2028

Russia Construction Market Size, Trends, and Forecasts by Sector - Commercial, Industrial, Infrastructure, Energy and Utilities, Institutional and Residential Market Analysis, 2024-2028

Summary

Following an annual growth of 7% in 2023, GlobalData expects the Russian construction industry to contract by 4.7% in real terms in 2024, owing to rising Western sanctions, coupled with rising material costs and interest rates, a growing budget deficit, falling government revenues and an exodus of skilled workers. Average construction material prices increased by 3% year-on-year (YoY) in 2023 according to Federal State Statistics Service (Rosstat). In addition, the price cap on Russian crude oil set by the Group of Seven Countries (G7) in December 2022, has plummeted the government’s oil and gas revenues 24% YoY in 2023, according to the Russian Ministry of Finance. But Russian oil and gas has been entering the global market, as intermediary countries are used to refine and produce crude oil and gas, meaning revenue to Russia has not been as negatively impacted by sanctions as intended. Similar methods are being used for the export coal, iron, steel and gold, while these methods are used for the import of military equipment, machinery, technologies and consumer goods. The falling government revenue is likely to impact the progress of certain public infrastructure projects. Additionally, under new federal budget plans for 2024-26 that got signed into law by the President in November 2023, the military spending for 2024 rose by 29% compared to 2023 to reach RUB12.8 trillion ($140 billion), thereby reflecting the continuation of the protracted war which can significantly dampen investor sentiment, hindering investment in the construction industry and stalling its growth.

Over the forecast period, GlobalData expects the Russian construction industry to register an annual average growth rate of 3.2% from 2025 to 2028, assuming political stability and continuation of investment flows into the construction industry, coupled with government investment in infrastructure, residential and renewable energy projects. In March 2024, the state-owned nuclear power company Rosatom, reported its target to have an installed capacity share of non-fossil fuel energy sources of 50% by 2030, and achieve net zero emissions by 2050 which will support renewable energy infrastructure. As part of the President’s pre-election promises, in February 2024, the President promised to invest RUB10 trillion ($109.9 billion) for the development of heavy infrastructure in the country by 2030. Of the total, RUB4.5 trillion ($51.2 billion) will be spent for improving public infrastructure and RUB250 billion ($2.8 billion) will be spent to develop airport infrastructure. Growth over the forecast period will also be supported by the government’s focus on investing RUB15.9 trillion ($224 billion) in the development of 4,000km of new roads, and expansion of another 3,000km of roads from two to four lanes by 2027. Of the total, RUB5.4 trillion ($88 billion) will be provided by the Russian Federal Road Fund, RUB7.2 trillion ($115 billion) by regional funds, with another RUB436 billion ($7 billion) to be provided by the Russian National Welfare Fund. Forecast period growth of the construction industry will also be supported by the RUB1 trillion ($11.8 billion) Tula Oblast Development Program which was launched by the government in January 2023 for the development of sports and educational infrastructure in Tula region by 2026.

GlobalData’s Construction in Russia - Key Trends and Opportunities to 2028 (Q1 2024) report provides detailed market analysis, information, and insights into the Russian construction industry, including -

• The Russian construction industry's growth prospects by market, project type, and construction activity
• Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in the Russian construction industry
• Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.

Scope

This report provides a comprehensive analysis of the construction industry in Russia. It provides -

• Historical (2019-2023) and forecast (2024-2028) valuations of the construction industry in Russia, featuring details of key growth drivers.
• Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
• Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
• Listings of major projects, in addition to details of leading contractors and consultants

Reasons to Buy

• Identify and evaluate market opportunities using GlobalData's standardized valuation and forecasting methodologies.
• Assess market growth potential at a micro-level with over 600 time-series data forecasts.
• Understand the latest industry and market trends.
• Formulate and validate strategy using GlobalData's critical and actionable insight.
• Assess business risks, including cost, regulatory and competitive pressures.
• Evaluate competitive risk and success factors.