Market Trends of russia sealants Industry
Increasing government investments in infrastructure and institutions including healthcare and education to lead the construction industry
- Construction is one of the major industries in the Russian economy which ranked 7th in the economy. The industry shares nearly 5% of the national GDP annually. However, the recent Russia-Ukraine war is expected to impact the country's economic growth, and industrial and construction projects are expected to be delayed due to the divergence of funds to the defense sector and currency devaluation. These factors are expected to impact the Russian construction industry.
- The construction industry output has reduced in 2020 due to the impact of Covid-19. The new floor area has been reduced by 100 million square footage in the same year compared to 2019. The shortage of raw materials, and labor, shut down of international borders for trade exchange, and a few others are the major reasons behind this reduction of construction output during the year in Russia.
- Residential construction is highly demanded in the country. These constructions share more than 60% of the new area built in Russia. Individual housing areas increased by 18.94% in 2021 from 39.8 million square meters in 2020.
- The President of Russia announced the construction of 13 new projects, ranging from education and healthcare to infrastructure development. The President has instructed the government to boost the country's economic growth above the world average by 2025. Thus, the Russian construction market is likely to register a 2% CAGR during the forecast period (2022-2028).
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Rising commercial vehicles production such as trucks propel the automotive production
- The automotive production market in Russia is not growing as it is majorly becoming an importer of passenger vehicles. Foreign companies hold the maximum share in the Russian automotive market as foreign manufacturers' shares accounted for 8.9 million units in 2020 compared to Russian manufacturers' 3.5 million units of passenger vehicles. This was due to geopolitical tensions in Russia in recent years.
- Minimal or null Y-o-Y growth is expected in 2022-2028, which is evident from the fact that car sales decreased by 78.5% Y-o-Y in 2022. Foreign players are leaving the Russian market because of socio-political reasons such as soaring financial sanctions by foreign countries on different resources in terms of exports and imports, growing interest rates by the Russian Federal Bank, and war conditions with the neighboring country Ukraine. Optimistically, there was an announcement made in March 2022 by the Russian Ministry of Industry and Trade to take the automaker CJSC Renault plant under government control to attempt the revival of the automotive industry, which can prevent the automotive market from going into huge losses during the forecast period 2022-2028.
- In the case of commercial vehicles, the production by Russian manufacturers is growing, with leading truck manufacturer Kamaz in Russia having increased the number of trucks produced from 5700 in Q1 of 2018 to 7400 in Q1 of 2021. This increase in the production of trucks is expected to contribute to the growth of the Russian automotive sector in the forecast period 2022-2028.
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OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- Despite the crisis from Western countries due to the Ukraine invasion, the Russian investments and aim to achieve 81% domestic manufacturing by 2030 boosts the aerospace demand
