Russian Construction Materials Price Slump Continues

07.04.2009 — News

THE SVERDLOVSK OBLAST.

On average construction materials prices fell 4.28% in January-March period of 2009 in Russia. During the time from September 2008 to April 2009 the prices fell further 12.42%, the Builders Association of Russia told RusBusinessNews. A drop in the ceramic brick prices has been the most significant: since the beginning of the year it went down 38.3% to 7,542 roubles for a thousand pieces. Portland cement prices fell 31.5% to 2,594 roubles per ton. The cement prices continued to decrease in 2009. At present one ton can be purchased for 1,968 roubles, whereas in the summer 2007, when cement prices peaked, the average price was 5,000 roubles. A slump in prices makes producers halt the production.

According to analysts the construction materials prices will continue to fall. Producers have to cut prices as there is no demand for their products, Konstantin Selyanin, the Director General of the Urals branch of the Accord-Invest company told RusBusinessNews. Many construction projects which started in Russia have been frozen due to the lack of financing and no one ventures to start new projects during crisis. According to Mr. Selyanin it is quite possible that the cement and brick prices can fall further 10-15% before the end of 2009. In 2010, however, when Russia begins to overcome the consequences of economic crisis, the prices for construction materials will slowly begin to grow.