"Ukraine Infrastructure Report Q4 2012" Now Available At Fast Market Research

Recently published research from Business Monitor International, "Ukraine Infrastructure Report Q4 2012", is now available at Fast Market Research

by Bill Thompson

(WireNews+Co) - Boston, MA - 28 October 2012

BMI View: Weak government finances, poor domestic economy and absence of private sector investments will be the main factors impeding robust growth in Ukraine's construction industry during our 10-year forecast period to 2021. We are forecasting lacklustre real year-on-year (y-o-y) growth of 3.6% in 2012 and a 0.7% y-o-y contraction in 2013, which is to be followed by modest growth averaging 3.3% per annum between 2014 and 2016.

Our cautious outlook for the construction industry growth stems from the ongoing weaknesses in the residential and non-residential construction sector, which accounted for almost 60% of total construction value in 2011 (according to BMI estimates) and is forecast to post annual average real growth of just 1.5% between 2012 and 2016. There is relatively more optimism in the infrastructure sector, where investments in transport and energy segments will help the sub-sector achieve 3.9% y-o-y average growth on over the same period.

View Full Report Details and Table of Contents (http://www.fastmr.com/prod/464573_ukraine_infrastructure_report_q4_2012.aspx) (http://www.fastmr.com/prod/464573_ukraine_infrastructure_report_q4_2012.aspx)

The key developments that helped shape our outlook for the infrastructure sector are:

- Growth potential in the railways and ports sub-sectors will help the overall transport industry to maintain strong growth. In May 2012, Ukrainian rail operator Ukrzaliznytsia announced it will electrify 1,467km of railway track by 2016, in a project costing nearly UAH16bn (US$1.99bn). Meanwhile, in July 2012, the Ukrainian government announced a EUR20bn (US$24.4bn) investment to upgrade the country's seaports between 2012 and 2022. The ports sub-sector will also receive a boost from the reforms likely come into effect in June 2013, which will allow ports such Odessa to take advantage of private investment.
- There has been some progress in the slow moving nuclear power segment in Ukraine. In July 2012, the Ukrainian Government approved the cost of the construction of a plant in Ukraine's Kirovograd Region to produce nuclear fuel. The development is significant as the new plant will be responsible for providing nuclear fuel to Ukraine's nuclear power generating plants.
- The electricity sector is also seeing an influx of renewable power investments, with solar and wind doing especially well. In July 2012, the European Bank for Reconstruction and Development (EBRD)'s approved financial assistance worth EUR13.3mn (US$17.6mn) towards a wind power plant in Western Ukraine.

Despite these positive developments, Ukraine continues to be placed at the bottom of our Central and Eastern Europe risk/reward ratings, with an overall score of 46.1 points - up from 43.9 points last quarter. Although the prospects for Ukraine's infrastructure and construction sector have improved significantly for the medium and long term, high levels of corruption relative to the rest of Europe and a looming recession in 2013 have proved to be a major dampener for its score.

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