In 2007-2009 the construction machinery market in Russia will enjoy average annual growth of around 20%. Demand is being driven by the booming construction sector and the overall poor state of machinery currently being used on construction sites across Russia. As a result, builders are facing a shortage of reliable equipment and are thus being forced to purchase more machinery, with imported engineering vehicles becoming increasingly popular.

At the end of August 2007, PMR, a research and consulting firm, published a new report, “Construction machinery market in Russia 2007. Development forecasts 2007-2009”. The report analyses the prospects of the market of construction machinery in the Russian Federation to help interested companies make proper decisions on future investments in this market.

According to PMR’s report, there has been a strong upswing in demand for construction equipment lately in Russia, with the market growing by 25% last year. This surge has been propelled by rising construction output, which rose by 15.7% in 2006. In the first half of 2007, construction output expanded even more decisively, by over a quarter – this will have positive consequences for the construction machinery market. Other major factors fuelling demand include the increasing availability and popularity of leasing schemes among Russian clients, a greater willingness to rent construction machinery, and a plethora of new orders for machinery thanks to current national projects as well as various federal and national programmes (including road construction programmes).

The growing number of construction sites across the country fuels demand for more building machinery. However, when the construction sector began to revive a few years ago, the existing stock was sparse and dilapidated. Since the beginning of the decade the country’s stock of engineering vehicles in use has nearly halved; the vehicles have continued to age and wear out in recent years. As a result, construction companies have had no choice but to purchase and replace equipment to keep pace with accelerating demand for their services. This is reflected in certain positive trends recently observed on the Russian construction machinery market, such as rising replacement rates and a subsequent decline in equipment wear and tear.

 

 

The attitude of buyers towards foreign equipment has also been changing. “Just two or three years ago, when faced with a choice between imported and domestic machinery, companies tended to opt for much cheaper Russian equipment,” Robert Obetkon, construction market analyst at PMR and the author of the report, explains. “Now, more Russians are choosing imported machinery ensuring higher productivity and greater reliability, even at a higher initial purchase price,” Mr Obetkon adds. Because of the growing popularity of new and used foreign equipment, the proportionate share of Russian manufacturers in the market has been declining steadily in recent times.

 

 

    More information on the report:   PMR Customer Service: tel. /48/ 12 618 90 30 e-mail: sales@pmrpublications.com     About PMR

PMR (www.pmrcorporate.com) is a publishing, consulting and market research company providing information, advice and services to international businesses interested in Central and Eastern Europe. With highly skilled staff, top ranked web sites and over ten years of experience, PMR is one of the largest companies of its type in the region.

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