RUSSIA (Russia is forecast to see 0.6% GDP growth for the remainder of 2019):
Economic growth in Russia is starting to slowdown in the 2nd half of 2019, consumer confidence is falling. The Russian VAT tax rate has increased from 18% to 20%. Construction activity in Russia is flat as we move further into 2019. Russian voters gave President Putin big win in late March, almost 70% of the electorate vote to give him his 4th term as President. It is hard to anticipate at this time the impact of his election will have on the Russian construction sector. Recent accusations by the UK Government of a poisoning incident in the UK have somewhat faded into the background, the recent seizure of a number of Ukrainian ships & their crews by Russian military forces continues to be problematic.
In Moscow & a number of other major Russian cities a huge ongoing repair, modernization & renovation effort is ongoing to literally 1,000’s of apartments & hi-rise tower blocks built in the 1960’s & 1970’s this huge ongoing project(s) could last up to five years to complete & cost in excess of $7 billion.
Russia recently became the 2nd largest oil producer, behind the US producing more than ten million barrels of oil a day. The Russian GDP forecast for 2019 has decreased & is between 0.4% & 0.7% which is sizable a drop from a year ago. Unemployment in the construction industry is somewhere between 10% & 15%, unemployment in other industries is forecast to be 4.7% to 5.1% for the balance of 2019.
Construction inflation for the balance of 2019 is forecast to be in the 4.8% to 5.4% range. The Russian construction market is forecast to experience some moderate growth in the oil / gas sector & restrained growth in the commercial / housing construction sector in 2019. It is worth noting that the Russian economy is similar in size to Italy, population 59 million, which is currently the 3rd largest European Union country. Russia’s population is 147 million.
