Rough waters for Russian construction market

Against the Russian macroeconomic backdrop (2015 GDP fell by 3.8%), the construction industry is also going through a difficult patch, and continued to shrink throughout 2015, in line with a downward trend that dates back to December 2013. According to preliminary figures released in January by Rosstat (Russia’s National Statistics Institute), the country’s construction output fell by 7% year-on-year in 2015, accelerating the pace of decline compared with 2014 (-2.3% on 2013).

The downturn in the building industry also had adverse effects on the local production of building materials. According to Rosstat, production fell by 7.4% year-on-year in the period January-November 2015, whereas figures for 2014 show a year-on-year rise of 1.1% compared with the previous year. The worst-hit material was cement, which saw an 8.9% fall in production over the first 11 months of the year (Table 2). Heavyclay brick production also fell, by 6.9%, to 6.3 billion units, as well as the production of bricks made of cement, concrete and artificial stone (-12,9).

Ceramic tile production went against this trend, growing by 3.2% until November and then stabilising at a lower level of +2.2% at 31/12/2015, equivalent to 170.4 million sq.m.

This positive year-end result was mainly attributable to the wall tile segment, which expanded from 70.8 million sq.m in 2014 to 75.1 million sq.m in 2015 (+6%), while the floor tile segment contracted slightly (-0.7%) to 95.3 million sq.m in spite of the growth in output on the part of Kerama Marazzi.

2015 Russian tile exports are estimated at around 22 million sq.m, while domestic consumption is projected to have fallen by about 11% to 195 million sq.m. Imports dropped sharply to an estimated 46 million sq.m (-36.4%). With the exception of Belarus which managed to limit the decline, all the other exporter countries suffered between 30% and 60% losses by volume. Imports as a share of domestic consumption fell to 23.8%.

Read the full article published on Ceramic World Review 115/2016