The business climate in the construction industry remains generally stable in the third quarter

The business climate in the construction industry remained generally stable in the third quarter, although, as follows from a review by the Center for Market Research (CSR) of the Higher School of Economics, the trend of strengthening business confidence was “corrected by some slowdown.” Thus, the entrepreneurial confidence index decreased slightly, by one percentage point, compared to the second quarter, amounting to minus 13%, but remained in a relatively favorable zone.

The key factors influencing the business climate in the sector are the physical volume of work and the supply of orders. Currently, an increase in the volume of work is noted by 19% of surveyed companies, a decrease – by 21%. Company estimates are more optimistic regarding the fourth quarter, which is usually the busiest in terms of input volumes: growth is expected at 23%, reduction at 12%. At the same time, estimates of production capacity utilization have improved: the average figure is 59% (versus 57% a quarter earlier). However, a year ago the average load was estimated at 66%.

Assessments of the supply of orders have deteriorated somewhat – detailed data is not provided in the review, but the HSE Center for Research and Control notes that two-thirds of organizations record that the number of concluded contracts remains at the level of the second quarter, and among other opinions, responses about their reduction prevail by a margin of three percentage points. According to Rosstat, the average supply of orders in the third quarter was six months, the same as in the previous quarter.

The business potential index, which reflects assessments of the trends that have developed and are expected in the coming months, remains in a favorable range – 99.8% (versus 99.7% a quarter earlier), which, as noted in the review, “signals that the production achieved during the year will be maintained.” activity and general financial and economic potential of construction companies.” However, says Georgiy Ostapkovich, director of the HSE Central Research Center, “one of the main unknowns is the economic behavior of the industry in the context of an increase in the Central Bank’s key rate and, accordingly, an increase in the cost of all types of loans, including mortgages.” Among the factors that limit development are still the high cost of building materials (indicated by 44% of respondents), high taxes (35%) and a lack of skilled workers (24%).

Evgenia Kryuchkova