Russian construction sector to expand by 0.3% y-o-y in 2013

Russia's construction industry in Russia struggled in H1 2013, contracting year on year by 1.9%. By September, the downward trend in construction activity eased, and for the nine months a 1.1% drop in construction output was recorded in the country. According to PMR estimates, the market was dragged down solely by the civil engineering construction sector. Russia’s federal budget for 2013 was set based on a projected GDP growth of 3.7%. However, according to the performances achieved in the first three quarters, this year GDP is likely to expand by 1.8% at best. Among the key factors behind this slowdown has been the poor performance in investment activity.
Russian authorities expect investment in fixed capital to expand 2.5% in 2013, a figure unlikely to be achieved considering that in the first three quarters of the year investment in fixed capital contracted by 1.4%. The decline in investment has partly come after many Russian large companies scaled back their investment programmes for 2013.

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