RUSSIA (Russia is forecast to see negative GDP growth in the 1st Q of 2021):
The Russian economy & construction sector has been seriously impacted by the pandemic. Russia is starting to see larger numbers of COVID-19 cases in a 2nd wave of the pandemic, it is currently reporting over 3 million confirmed cases and more than 50,000 deaths. Russia has closed its borders to foreigners in recent weeks.
Russia announced in August that it had produced a COVID-19 vaccine (Sputnik COVID-19 vaccine) that went into full production in September, Russia has been successful in selling this vaccine to a number of countries around the world, including Argentina & Belarus. The COVID-19 virus has been responsible for up to 40% to 60% of ongoing construction projects to be shut down or delayed, the projects that have continued to work have imposed rigorous safety and travel restrictions.
Russia also continues to be vulnerable to US and Western European economic sanctions that will continue to suppress construction activity. The COVID-19 virus will influence future CAPEX projects and some projects will be cancelled.
Oil prices have dropped by more than 25% in the last 12 months. An agreement between Saudi Arabia and Russia — two of the world’s largest oil-producing countries has been reached, however, oil prices continue to be depressed which will stymie the Russian economy and construction sector. A severe fall in the Russian Ruble after the dramatic oil price drop has given Russia a strategic advantage. Russia can now pump & produce oil at a lower price or similar price than Saudi Arabia. If this situation continues, look for decreased investment & activity in the US & International oil patch.
The certainty is that many Russian-related construction projects will be delayed, deferred or worst case situation cancelled due to the pandemic as we move into 2021, this situation could short term raise construction unemployment rates.