Construction in Ukraine – Key Trends and Opportunities to 2023

The Ukrainian construction industry registered an annual growth of 17.5% in real terms during 2016-2018, following an average annual contraction of 16.4% during 2014-2015. This was due to positive developments in economic conditions, and investments in transport infrastructure and energy and industrial construction projects. Additionally, government efforts to attract foreign investments, in order to develop the country’s overall infrastructure, supported the industry's growth.

The industry’s output value is expected to continue to expand over the forecast period (2019-2023), with investments in infrastructure, health, education and manufacturing continuing to drive growth. In 2018, the government approved the Drive Ukraine 2030 program in order to develop road, rail, airports and ports infrastructure across the country. For this, the government plans to invest UAH1.7 trillion (US$60.0 billion) through the public-private partnership (PPP) model. Moreover, the government plans to invest UAH310.2 billion (US$11.4 billion) to develop the country’s road infrastructure during the period of 2018-2023.

In December 2018, the International Monetary Fund (IMF) approved a bailout program worth UAH106.1 billion (US$3.9 billion) to Ukraine in order to repay its debts and stabilize economic activity. Moreover, in October 2018, the government issued bonds worth UAH54.4 billion (US$2.0 billion) in a bid to raise funds from public; this is expected to increase the government’s ability to spend on infrastructure projects.

The industry’s output value is expected to rise at a compound annual growth rate (CAGR) of 7.67% in real terms over the forecast period.

GlobalData’s "Construction in Ukraine – Key Trends and Opportunities to 2023", report provides detailed market analysis, information and insights into the Ukrainian construction industry, including –
– The Ukrainian construction industry's growth prospects by market, project type and construction activity
– Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in the Ukrainian construction industry
– Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.

Key Highlights

– GlobalData expects the infrastructure construction market to increase in importance over the forecast period and account for 41.6% of the industry’s total value in 2023. The government’s focus to modernize the railway infrastructure is expected to drive the market growth over the forecast period. The government plans to invest UAH162.2 billion (US$6.1 billion) to modernize and expand the railway infrastructure across the country during the period in 2017-2022.
– Industrial construction market’s forecast-period growth will be driven by the government’s effort to attract manufacturing companies with an aim to increase the country’s exports and support economic growth. In August 2018, the government announced plans to build a new industrial park in Dnipro City with a total investment of UAH2.7 billion (US$99.2 million). Moreover, in March 2019, Volytsia-Agro LLC announced that it would invest UAH345.0 million (US$12.0 million) to build a new logistics complex by 2020.
– GlobalData expects the energy and utilities construction market to record a forecast-period CAGR of 18.49% in nominal terms, driven by the government’s focus on the development of an internet network across the country. In 2018, the government launched the Concept for the Development of the Digital Economy and Society of Ukraine for 2018-2020. Under this, the government plans to develop digital infrastructure across the country by 2020. In May 2018, Ukrtelecom announced plans to spend UAH6.0 billion (US$166.0 million) to connect 8,000 villages with a high speed broadband network by 2020.
– Forecast-period growth in the commercial construction market will be driven by rising wholesale and retail activity in the country and the rising tourist arrivals. With an aim to attract more tourists, in November 2018 the government launched the Kyiv Tourism Development Program 2019-2021. Under this, the government plans to spend UAH219.1 million (US$8.1 million) for the development of tourism infrastructure during the period in 2019-2021.
– The total construction project pipeline in Ukraine – as tracked by GlobalData, and including all mega projects with a value above US$25 million – stands at UAH1.6 trillion (US$57.4 billion). The pipeline, which includes all projects from pre-planning to execution, is skewed towards late-stage projects, with 59.1% of the pipeline value being in projects in the pre-execution and execution stages as of April 2019.

Scope

– This report provides a comprehensive analysis of the construction industry in Ukraine.

– Historical (2014-2018) and forecast (2019-2023) valuations of the construction industry in Ukraine, featuring details of key growth drivers.

– Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector

– Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.

Reasons to Buy

– Identify and evaluate market opportunities using GlobalData's standardized valuation and forecasting methodologies.

– Assess market growth potential at a micro-level with over 600 time-series data forecasts.

– Understand the latest industry and market trends.

– Formulate and validate strategy using GlobalData's critical and actionable insight.

– Assess business risks, including cost, regulatory and competitive pressures.

– Evaluate competitive risk and success factors.