Russian construction industry gets back on track
Russia’s construction industry is one of the world’s largest – worth over $150 billion. From now until 2020, building in Russia is expected to grow at a compound annual growth rate of 1.76.
Between January and August 2017, Russia completed construction works worth 57.3 billion euros. Investments flow into the modernization and expansion of roads. A record number of mortgage loans are used to finance housing. Imports of German construction and building material machinery significantly increased in the first half of 2017. Exclusive housing projects and urbanism offer business opportunities for German developers and architects.
So what is behind Russia’s construction renaissance? The country is investing tons of money into several huge projects and nationwide initiatives. Moscow alone is packed with a high number of large-scale projects. Transport and infrastructure upgrades are other engines of construction growth.
Russia relies on German production for construction machinery. The average age of construction machines amounts to 7.8 years and encourages new purchases, which creates a lot of opportunities for German manufacturers. According to the German Engineering Federation (VDMA), sales of road construction technology from Germany in Russia increased in the first half of 2017 by 22.2 percent compared to the same period last year to reach 198.3 million euros. There is a high demand most notably for excavators, front loaders and other non-self-propelled earthmoving machines, as well as grinding, polishing and leveling machines.
Not to be underestimated is the German contribution in the field of construction chemicals. Between January and June 2017, Russia imported more than 6 million liters of water-soluble paints from Germany for about 10.9 million euros, an increase of 5.3 percent vs. same period last year. At the beginning of October 2017, BASF opened a € 5 million plant for the production of construction chemicals in Saint Petersburg.