The number of bankruptcies among construction companies in Russia has risen sharply
In Russia, the number of bankruptcy cases involving construction companies rose by more than 30% over three months—from 1,089 in June to 1,454 in early September. On a year-over-year basis, the figure increased by 41%, according to a study by “Kontur. Focus,” whose data is cited by Russian media.
These are primarily regional developers. In particular, the following companies were declared bankrupt: “Ak Bars Construction Company” in Kazan, “Vysota” Construction Company in Chelyabinsk, “Salair” in Surgut, "Zvezda-2013" in Perm, KDSK in Krasnoyarsk, and "Avangardstroy" in Novosibirsk were declared bankrupt.
Industry representatives cite falling demand amid high financing costs as one of the main reasons for the rise in bankruptcies.
“Without a sufficient number of orders, it becomes difficult for construction companies to meet their current obligations: pay taxes and salaries, service loans, fulfill contracts without advance payments, and so on,” said Maxim Fedorchenko, president of the Association of Construction Organizations of the Novosibirsk Region.
According to him, the volume of work in the industry is shrinking due to a 10% decline in investment activity in the economy, cuts in government-funded construction, and a sharp drop in demand for housing. In various regions, demand has fallen by 30–50% or more.
Fedorchenko predicts that, as a result, housing completions could decline by roughly the same amount.
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