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Kazakh construction booming thanks to new builds and foreign firms

The construction industry in Kazakhstan is growing steadily, and new research from the country shows why. There has been an increase in new buildings being created, which is allowing firms to profit from an improving market and an increased need for labour and construction materials.

The value of the nation's construction industry has pushed past the $12 billion mark over the last year. This is due to specific projects. First of all, Kazakhstan is constructing many new homes, and these residential schemes are largely responsible for this growth. In addition, new builds are proportionally greater in quantity than in previous years.

A third trend can also be spotted - that of an increased reliance on companies from overseas. More and more of Kazakhstan's construction projects are being completed by foreign firms, and this in particular looks likely to continue in the near future with the increase in new houses being built.


Housing construction increases

Statistics from Kazakhstan's construction industry show that in July, roughly 602,500 sqm of housing was completed. Based on the average size of a Kazakh dwelling, this equates to over 9,000 homes, which is the most completed in a month in the country for around three years.

The year-on-year increase is significant. In July 2014, 422,900 sqm of residential buildings were constructed in Kazakhstan. This means that in 2015 there was an boost in construction of almost 180,000 sqm, which is a rise of 42.5 per cent. Over 70 per cent of these buildings are residential, with 24 per cent being constructed for commercial firms and five per cent being used for the public sector.

Most of this construction took place in the region of Almaty, which also saw the most dramatic increase in house building. Over 49,000 sqm of housing was constructed in July 2014, but this year that figure has risen to 174,400 sqm; over 3.5 times as much.

A significant amount of activity also took place in Kazakhstan's capital Astana, which will host AstanaBuild next year. The city saw an increase of almost 150 per cent over the last year, with more than 120,000 sqm of residential construction taking place in 2015 compared to just 48,500 the year before. Combined with Almaty, these two regions make up almost half of all the housing built in July.


A rising amount of new builds

Compared to previous years, new builds make up a higher proportion of construction work than repairs and maintenance. According to PMR, a market information provider, new builds made up 85.1 per cent of all construction work last year. In 2012, they were responsible for 82.3 per cent.

This has helped the construction industry in Kazakhstan to grow overall by 4.6 per cent in the last year. It is now worth approximately $12.4 billion, and PMR believes this is largely to do with the impressive increase in new residential construction.

The number of new houses build in Kazakhstan hit a 20-year high in 2014, with a total of 7.5 million sqm completed. As more recent statistics have shown, 2015 looks set to eclipse this figure.


Increased use of foreign firms

One side effect of the boom the Kazakh construction industry has found itself in is that the nation is increasingly reliant on the work of companies from overseas. While previously, Kazakh firms took on almost 85 per cent of all the construction in the nation, in the last year this has decreased to 77.3 per cent.

This means over one fifth of construction work in Kazakhstan is now undertaken by foreign companies. Combined with the increase in new buildings being started, this has made Kazakhstan an excellent place for international firms to trade, whether they are offering labour or building materials.

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