Construction output in Russia down 10% in the first quarter
The volume of construction work in Russia totalled RUB 2.91 trillion in the first quarter, down 10% year-on-year in comparable prices, according to data from Rosstat.
According to the statistical agency, construction activity (including residential and non-residential buildings, civil engineering structures, etc.) declined across all federal districts between January and March. The sharpest decreases were recorded in the Northwestern Federal District (-18.4%), the Ural Federal District (-15.1%) and the Southern Federal District (-13.7%).
Experts interviewed by the publication attributed this trend to unfavourable weather conditions, the calendar effect (fewer working days at the beginning of the year), and weak demand in the housing market caused by the Central Bank of Russia's high key interest rate and tighter conditions for subsidised mortgage programmes.
Despite the decline, construction remains one of the largest sectors of the Russian economy, directly accounting for around 6%–7% of GDP, according to Anton Trenin, an expert with the Corporate Ratings Group at ACRA.
Taking into account related industries—including the production of construction materials, transport, machinery manufacturing, engineering and real estate operations—its contribution to overall economic activity is even greater.
Nevertheless, Oleg Abelev, Head of the Analytical Department at investment company Rikom-Trust and Candidate of Economic Sciences, believes that the real volume of construction work will decline by 10%–12% by the end of 2026.
At the same time, he believes that the situation in the sector may improve in the second half of the year thanks to state-funded projects, primarily in infrastructure construction.
Anna Belyakova, Partner in the Engineering Practice at Strategy Partners, shares this view. Among the priority areas, she highlighted the modernisation of public utility infrastructure, including water supply facilities, heating and gas distribution networks, and boiler houses.
However, residential construction, she added, is expected to remain the weakest segment. Housing completions will stay at a high level due to projects already under construction, while the launch of new projects will decline significantly.
The sector will demonstrate "flexibility and adaptation to current conditions," hopes Yulia Katasonova, Senior Director for Non-Financial Company Ratings and ESG Ratings at the National Rating Agency (NRA).
She also believes that infrastructure projects will continue to benefit from government funding, while industrial construction will keep expanding amid the growth of e-commerce and the restructuring of logistics chains. According to the expert, this should stimulate the construction of warehouse facilities.
