According to the results of 2023, the volume of construction work in Russia will exceed 15 trillion rubles.

Projects in the construction industry that were postponed in 2022 began to be actively launched this year, which could contribute to the growth in construction volumes throughout Russia by 7-11% year-on-year, up to 15.5 trillion rubles, analysts predict. The indicator will also be affected by the revision of contract budgets due to the rise in the cost of materials and equipment. The industry is negatively affected by the depreciation of the ruble, market participants admit, although they expect the pace of growth in construction volumes to continue next year.

According to the results of 2023, the volume of work in the country’s construction industry will grow by 7-11% year-on-year in comparable prices, to 14.9-15.5 trillion rubles, according to the Sherpa Group forecast, which Kommersant has read. In this case, the growth will be higher than in 2022, when the industry invested in new projects at comparable prices by 5.2% more year-on-year – 12.9 trillion rubles.

Alexandra Galaktionova, CEO of Sherpa Group, explains this by the deferred demand for construction in all segments since 2022. In addition, according to her, the indicator is affected by the beginning of the pre-election cycle, which usually coincides with the completion of large construction projects and the opportunity for market participants to use government support tools. For this reason, the expert continues, this year the authorities of the regions were allowed to take funds from the budget provided for later periods.

Sherpa Group analysts expect that this year the amount of funds provided by regional officials to builders will grow by 2-6% in comparable prices, to 2.2-2.3 trillion rubles. This is much better than the result of last year, when 2 trillion rubles were brought to contractors, which is 10.6% less year-on-year in comparable prices, the company said. However, Alexandra Galaktionova adds, “this is still not enough for the sustainable development of the economy.”

Customers and investors of construction sites are adapting to new realities by revising design solutions, optimizing the timing and cost of project implementation, says Khusein Pliyev, CEO of Smart Engineering Group of Companies. Only since the beginning of this year, building materials produced in the country have risen in price by an average of 20%, and imported products by 50-300%, says Maxim Lazovsky, owner of the Dom Lazovsky company.

Housing developers have also become more active in bringing new projects to market. According to the information system “Nash.Dom.RF”, now 102 million square meters are being built throughout the country. m of housing, which is much more than in previous years. This is due to the deferred demand of buyers who did not dare to buy in 2022 due to general uncertainty, explains Alexei Gusev, CEO of Glavstroy-Nedvizhimost.

Commercial construction in 2023 will also show tangible growth compared to 2022, Vladislav Preobrazhensky, executive director of the Moscow Investors Club, is sure. The low base effect will also affect this segment, he explains. Investors understand that in other segments of the economy it is now difficult to find a higher yield than commercial real estate, says Evgeny Platonov, Financial Director of Time Development.

So, for example, in the Moscow market in January-June 2023, 102.4 thousand square meters were completed. m of office real estate, which is almost three times higher year-on-year, Ricci notes. The construction of shopping centers has also accelerated. According to Nikoliers estimates, in the first half of 2023, in Moscow and satellite cities, developers commissioned twice as much retail real estate year-on-year – 46.3 thousand square meters. m.

The largest increase in the overall growth in the volume of construction work falls on industrial construction, said Dmitry Panov, coordinator of Business Russia for the North-Western Federal District. In his opinion, the key growth driver in this segment is the accelerated implementation of import substitution projects amid external sanctions pressure and the use of state support measures for investors.

However, the construction industry is still sensitive to current inflationary changes and the devaluation of the ruble, says Olga Nart, Commercial Director of Neometry. These factors, according to her, affect the cost of construction, the consequences of the growth of which will be noticeable by autumn. Nevertheless, Hussein Pliyev expects that the growth rate of construction volumes in 2024 will continue due to the fact that investment projects have long implementation cycles.

Daria Andrianova