Construction industry shows growth in Kazakhstan

Over the period from January through April more than four million square meters of property were built in Kazakhstan. The total amount of investments that were put into the industry surpassed $1.9 billion. The fastest-growing sectors of the industry became non-residential buildings and oil and gas pipelines.  

According to the Bureau of National Statistics of Kazakhstan, installation and construction work, which accounts for 88% of the construction industry ($1.7 billion), added 10% of the industry growth in terms of money. For comparison, major and minor repairs have shown unimpressive results: +0.2% and -4.4% respectively. Over the same period (January to April) last year, this sector demonstrated much better financial results.

The vast majority of revenue the industry gets is from the construction of non-residential buildings and facilities (82%). The residential buildings sector consumed the remaining 18% of all investments ($359 million). This is 2% lower than the same period last year though.

In terms of the industry actors, the vast majority of those who play a significant role in the market are local construction companies (78.8%) and foreign players (21%). The public construction enterprises account for a tiny portion of the market (0.2%).

Interestingly, foreign companies have managed to strengthen their positions in the market. Last year their share was 15.6%.

The industry grew almost everywhere except in two regions: the Turkestan region (-18%) and the Mangystau region (-26%). Among leaders are the Akmola region (+37.5%) and the region of Atyrau (+15%). Over the four months, the construction industry in this region consumed $515 million of investments.

Concerning other cities and regions, they have shown quite a modest dynamic of steady growth (in the range from 2% to 9%).

The main reason for that growth is a price increase in construction materials price increase, according to different construction firms. They are afraid that the prices may surge further. If this happens, they won’t be able to meet contractual obligations because of lower prices for materials that have already been written in the agreements.