Business activity in the construction sector in the first quarter of 2021 recovered to pre-pandemic levels

15.05.2021       

Business activity in the construction sector in the first quarter of 2021 recovered to pre-pandemic levels — As follows from the material published on Friday by the HSE Central Research Institute, the index of entrepreneurial confidence increased by 3 percentage points, to minus 15%, which became one of the best values ​​for the pre-crisis 2018-2019. Improvements are observed for the second quarter in a row — in October & December 2020, the construction industry was second only to agriculture and manufacturing in terms of optimism. Prior to this, construction in terms of the share of pessimistic assessments was second only to the service sector, which was badly affected by the pandemic.
This dynamic is explained by a further improvement in estimates of expected employment, which, according to the CCI, "after a serious decline, was replaced by a post-shock increase in optimism." To clarify, last year the industry experienced a labor shortage caused by the departure of migrants. However, according to HSE experts, this problem mostly concerned “small and financially weak construction companies”; — large companies were able to hire Russians, albeit increasing their costs. It is too early to talk about solving the problem — 20% of companies pointed to the aggravation of the shortage of workers (against 17% a quarter earlier), only 13% of organizations recruited new specialists.
Another factor in improving the business climate in the industry — though modest, but still a steady improvement in estimates of the actual state of the portfolio of orders. According to the vice-president of the Center for Strategic Research Diana Kaplinsky, the availability of orders in April amounted to 4.7 months, while a year earlier it was estimated at 3.2 months. However, about 40% of company executives call the existing portfolio of orders "below the normal level"; — only 14% recorded an increase in orders.

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