Ukraine’s construction industry building on weak foundation

Ukraine’s construction sector managed to emerge from the deep recession seen in 2008 and post a growth of 11.1% y/y in 2011. Thanks to the EURO 2012 preparations. However, the growth will likely slow down this year amid struggling economy and the absence of private sector investment.

Throughout 2012, the best results were reported by the primary market of Kiev residential housing. As analysts are pointing out, this segment is expanding following adequate pricing policy and installment programs provided by the developers.

In general, residential housing prices have been slipping during the year due to global economic slowdown and the population’s weak purchasing capacity. This, alongside with the absence of mortgaging and growing tax rates led to market stagnation. In January to October, construction works in the country declined by 10.2% y/y to UAH 48.8bn (USD 6bn), the State Statistics service said.

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