Following a cumulative decline of 42% in construction activity in Ukraine between 2012 and 2015, research firm PMR has reported that activity grew by 17% year-on-year in 2016, boosting the business confidence index figure for the second quarter of 2017 to its highest level in three years.
This recent upsurge in construction activity – which applied to all subsectors – was said to reflect, in part, the fact that the sector was recovering from such a low base. PMR said it was also helped by the improving macroeconomic figures, including a rise in disposable personal income.
The strengthening consumer purchasing power and improving economic environment were believed to have encouraged a revival in the private sector, which in turn drove up demand for building materials, primarily for infrastructure development projects.
In the period from January to April 2017, the significant increase in total construction output was fuelled by a solid performance in the non-residential subsector, which grew by almost 21% year-on-year. This was complemented by a 17% expansion in both residential construction and civil engineering output.
Prospects for the Ukrainian construction industry were said to remain relatively good in the medium to long term, with the upward trend expected to continue throughout 2017. This was supported by the fact that most of the country’s production facilities and transport infrastructure were said to be in need of reconstruction or extensive modernisation.
Furthermore, there was said to be scope for growth in Ukraine’s per capita housing stock, which was reported to be 25m2 – a significantly lower figure than in most European countries, where it apparently exceeded 30m2.