Private housing construction may help somewhat improve housing construction performance in 2015
Amid overall decline in the housing construction in 2015, private housing construction has demonstrated growth as compared with 2014. However, the overall performance of the construction industry in 2015 is likely to deteriorate and private housing construction may only help improve some statistical data and slightly slowdown the overall deterioration.
In January – May 2015, construction volumes in Belarus decreased by 2.4%, which had a negative impact on GDP (by 0.3%). Overall, 2.2 million sq. m. of housing has been built, of which 1.2 million sq. m. accounted for private housing construction. The bulk of private housing has been commissioned in Minsk and Brest regions. Due to high commissioning rates in private housing in Q1 2015, this industry has become of the economic drivers in Belarus; however, it would be unable to remedy the overall decline.
Despite some statistical growth in private housing construction in 2015, the construction industry is unlikely to show good results by the year-end. The volume of state subsidised housing construction for citizens eligible for state aid, has reduced to 2 500 000 sq. m. Many companies have cut or abandoned their investment plans.
Most industrial modernisation projects have been completed. In 2014, in the view of the World Ice Hockey Championships, many electric power and infrastructure facilities were commissioned, which has created a high comparative base for 2015. Ongoing construction works include: road construction Mogilev – Gomel and Mikashevichi – Minsk; the construction of the Belarusian nuclear power plant and a plant for the production of sulphate pulp in Svetlogorsk. Amid anticipated budget cuts, the volumes of state aid may be reduced, leading to a further reduction in the construction volumes.
Housing construction indicators in 2015 would be worse than those in 2014, however better than anticipated due to the results achieved in Q1 2015.
According to Belstat, in August 7,600 people were dismissed, including 4,800 civil servants. Dismissals of civil servants were due to the optimisation in the public administration by up to 30%. Some civil servants would retain their job however would lose the status of a civil servant. Vacancies on the labour market are likely to reduce in number, thanks to the optimisation, the state administration would increase wages for public servants. The payroll fund for retained employees is likely to increase and some former state employees are likely to get jobs in affiliated organizations. The optimisation of the state apparatus should complete by January 1st, 2018, and some former civil servants are likely to join the ranks of the unemployed.