Decline continues in value of construction work contracts

2009-12-08

Despite the promising first quarter of the year, during which construction companies in Russia obtained construction work orders worth 23% more than those of last year, the reduction in the value of the contracts signed which started in April affected all of the subsequent months and led to a January-November figure smaller than that of last year.

Between January and November 2009 large and medium-sized construction companies in Russia signed construction work contracts and other construction orders with clients for the future delivery of services worth RUB 3,299.9bn (€75.2bn) in total, which is nominally 2.7% less than those of the equivalent period of last year. This does not augur well for construction business in Russia in the next few months.
The contracts signed in the first quarter of the year were worth 23.3% more than those of the corresponding period of last year. In April, however, the value of the contracts declined slightly in comparison with that observed in April 2008, and this trend continued in the following months. In November contracts signed were worth RUB 224.2bn (€5.1bn), which was RUB 69.2bn less than a year before.
In the first four months of 2009 and between June and August, the backlog of orders recorded exceeded that of the corresponding periods of last year. In September, however, the indicator fell short of that a year before. Despite a small improvement in October, when it returned to the level of last year (1.5 months), it fell again in November. During this month construction companies in Russia were ensured work for another 1.4 months, whereas last year the figure was 1.5 months.

[1] The monetary value of construction work contracts concluded should not be confused with the value of construction output, as the former refers to construction work to be carried out in the near future and the latter to work already completed.