Bureau of technical supervision

Prospects of development of the construction industry in Ukraine

Construction industry is one of the most important sectors of the economy , which determines the efficiency of the entire economic system of the country. The importance of this sector to the economy of any country can be explained as follows: capital construction creates more jobs and uses the products of many industries. The economic effect of the development of this industry is the multiplier effect of money invested in construction. After the development of the construction industry developing production of construction materials and equipment , machine building , metallurgy and metal processing , petrochemical , manufacturing of glass , wood and porcelain industry , transport, energy and so on. Also construction than any other sector of the economy contributes to the development of small and medium sized businesses.

The development of the construction industry will inevitably cause economic growth in the country and solve many social problems. At the present stage is quite difficult to talk about any of this competitive industry. If the regional trend clearly rule of construction companies and central areas of large cities – millionaires due to their large capacity and investment attraction , the global construction industry in Ukraine is far behind due to lack of necessary financial and organizational transformation.

 

 

 

Construction in Ukraine is now in decline : the fixed assets are worn by almost 60% on average per family are three times lower than in Russia, and four times than in Lithuania. Compared with Western countries housing in Ukraine is less than 3 – 5 times.

 

 

 

In 2000 he worked profitably during January – November only 41 % of large and medium-sized enterprises : compared to January of that year, the proportion of organizations decreased by 13%. State industrial development and prospects of its development are conditioned by the general state of Ukraine’s economy , which this year were recorded positive changes. For the first time since Ukraine’s independence was obtained growth in GDP of 5.6 %, industrial output grew by 9.7% over 1999 and 26.2 % increase in investment in fixed assets.

 

In January – September 2012 the company performed works 42.1 billion. , In comparable prices is 90.9 % and in construction from previous years. The decline in production caused by the first decline in the construction of buildings by 10.6 %, and installation of engineering equipment and buildings by 4.2 %.

 

The main problem is the construction of an increase in the cost of works due to higher prices of basic components of construction. In order to maintain the level of profitability of construction companies are forced to raise the cost of works and services, resulting in a negative impact on the dynamics of demand from customers ( investors).

 

Unprofitable building reduces its attractiveness. Last year, the number of unprofitable companies exceeded 55% of the total area. Slow growth of long-term loans are also limited opportunities for increasing funding for investment projects. Reducing the volume of loans granted to individuals and non-financial corporations in the acquisition, construction and reconstruction of substantially reduced demand.

 

 

 

In the near future (10 – 15) the construction of new production facilities will be conducted in small quantities. The main priority areas of structural reorganization of industrial construction will be expansion , reconstruction , redevelopment and technical re-equipment of existing industrial facilities. Unfortunately, the government does not pay enough attention to industrial development through increased spending on social services as a result – the amount of budgetary investment in capital construction declined sharply .

 

As for housing , in 2000, failed to stop the reduction of housing construction , which is built 5.36 million m2 total area. According to the leader of the Cabinet of Ministers – Mykola Azarov plans in 2011 to construct a 10.2 million m2 of housing , which corresponds to the pre-crisis 2007.

 

In terms of housing developers intend to continue construction work on 43.1% of assets under construction , the final stop – at 24.9 %. That is, every fourth housing under construction in Ukraine will be preserved , and work will continue on the third object .

 

The main reason why the construction is suspended or closed down , SSC in 90.9 % of cases called ” lack of funding “. Other reasons such as ” not to build ” and ” non-compliance “, respectively are within the statistical error and are not of interest to consider. But that does not fit within the statistical error , is the fact that the total cost of unfinished projects in Ukraine was estimated at 820 billion. , Ie 55% of Ukraine’s GDP in 2012.

 

 

 

Thus , the main problem of the construction industry in Ukraine – the formation of extra-budgetary investment. Today, there are several possible ways to attract resources for lending to construction and housing. The sources of these resources , in particular, may be: population needs to improve housing conditions , companies that want to solve housing problems of their employees , public authorities and local administration , financial investors.

 

 

 

Eng .: Status and prospects of development of the construction industry in Ukraine

 

The condition of Ukrainian building sphere development is observed. The changes, which took place in the industrial, housing and uncompleted building for the last decade are analised. The prior directions of the sphere development are suggested.

 

 

 

Author : WW Byba , Ph.D., Associate Professor , VS Hatash student .

 

Source: Collected Works , Series : Sector engineering , construction

 

References: Status and prospects of development of the construction industry in Ukraine. / V. Byba , VS Hatash / / Coll. sciences. works ( branch of engineering , construction). – Poltava: PoltNTU , 2013 . – Vol. 4 ( 39). Volume 2 – C 3 – 9.