Russia is forecast to see 1.4% to 1.7% GDP growth in the 2nd Q of 2026
The war in Iran could benefit Russia with oil prices reaching more than $100 to $125 a barrel. Russia is generating between $600 to $800 million additional revenue each day from increased oil sales and the lifting of sanctions as the conflict in Iran drags on.
Russia’s 2026 construction is set to experience a significant slowdown after a somewhat reasonable 2025. A housing oversupply situation still continues in most of Russia’s major cities. However, there a few bright spots in the Russian construction sector such as Data Centers, Logistic Centers / Military Component Production facilities.
Reasonably high inflation and problems purchasing most imported major equipment and construction related materials persist and continues to increase material costs and lengthen delivery times.
Russia is experiencing a huge cost increase in petroleum products, in the last couple of months petrol / gasoline has increased by 25% to 35% a liter, due to supply shortages across all regions of Russia, created by Ukraine’s continuing drone attack on Russian refinery facilities, which by all accounts have been seriously damaged. Up to 20% of Russia refining capacity has been damaged. Certain Russian regions are experiencing major shortages of petroleum products which will impact future construction activity.
The US attitude towards Russia has changed in the last month, with a definite cooling of relationship towards President Putin & Russia & a more conciliatory approach to Ukraine, it will be interesting to see how this plays out in the coming months. There could be serious complications if any NATO member country shoots down any Russian flights that enter their airspace.
Russia’s ruble has weakened in the last 3 months to 80 Russian Ruble to the US Dollar. Russia’s economy appears to be in a state of flux. Russia is currently experiencing a high construction inflation rate of between 8.5% and 10.5%.
Russia’s construction sector has contracted by 5% in the last 12 months. Unfortunately, the Russia-Ukraine conflicts have impacted the Russian Economy and the Russian Construction Sector. Look for this problem to continue until a peaceful solution can be found, hopefully in the next 3 to 6 months.
Russia continues to utilize its vast reserves of natural gas, oil, coal, fertilizers & minerals to maintain its political / economic power with countries such as India, China, Brazil, North Korea & Belarus.
The Russian economy prior the commencement of hostilities in Ukraine was slightly smaller in economic terms than Italy. Price hikes, high inflation and rising unemployment appears to be on the cards in the next 6 to 12 months.
The number 1 question for the Russian construction sector is: How long will the Iran conflict last and will it drive up inflation in the next 3 to 6 months?
