The war and reconstruction of Ukraine

The Ministry of Foreign Affairs has published 21.12. The first part of the national plan for the reconstruction of Ukraine.

The plan deals with the needs of Ukraine's reconstruction and its international organization. The plan presents financial solutions that companies could use for market research, partner search, export financing and investments. In addition, the report highlights advisory services that companies can get from the organizations of the Team Finland network and other actors in the business world.

Construction industry RT's survey results

The Bank of Finland predicts that Finland's economic growth will be between 0,5 and 2 percent this year. Sanctions freeze Russian trade. Uncertainty slows down consumption and investments. Prices are rising across the board (energy, fuels, raw materials, etc.). The abundant workforce in construction keeps the sector's activity at a good level during the beginning of the year, but the cumulative cost development can slow down the planned start of new projects. The housing market situation remains stable. Uncertainty in investments other than residential construction has grown.

In March-April 2022, the construction industry RT investigated the effects of the war in Ukraine on the construction industry. The report consisted of scenario work commissioned by RT by an external consultant and a survey directed by RT itself to its member companies.

The goal of the scenario work was to identify the risks and effects on operators in the construction industry. The aim of the member survey was to map the effects of the war on the current production and business operations of companies, as well as the threat images related to the crisis.

Check out the report summary here (pdf)

Read here the announcement 22.4.2022 April XNUMX: Construction industry RT: All companies in the industry are now feeling the effects of the war in Ukraine; most upset about the development of investment demand and material prices

After the Russian attack, the effects of the Ukrainian crisis in the construction industry were especially related to the increase in cost levels such as the prices of materials, fuel and energy, as well as supply chain and logistics disruptions. The effects were visible, for example, in the availability of construction products and spare parts. In recent months, cost pressures and availability problems have eased.

In order to ease the plight of companies, RT proposed a temporary light fuel oil tax reduction to the state in autumn 2022, which was finally implemented. Discussions about the situation of the companies were also held with the public sector customers (Väylävirasto and municipalities).

Apartment shop (member newsletter 9/2022)

The crisis and the restrictions and sanctions imposed as a result of it may have effects on ongoing housing projects implemented as foundation contracts on a case-by-case basis. However, the crisis in Ukraine does not automatically constitute an overwhelming obstacle to construction work as defined by the Housing Sales Act. More information on the subject in the House Construction Industry member letter 9/2022 (requires login) or from Juha Terho.

The war in Ukraine can create an overwhelming obstacle in contractual relations. Labor and material shortages can already cause a delay in execution at this stage. In the terms of the agreement, martial law is an overwhelming obstacle (YSE 1998 & RYHT 2000). RT members can turn to the legal experts of their own industry association.

There have been an estimated 2 Ukrainian workers at the construction sites, especially in reinforcement and HVAC work. The launch of the business may affect the amount of the Ukrainian workforce. There are 000–3 Russian and Belarusian workers. Their work has not been affected by Russia's war in Ukraine so far.

RT's preparedness and foresight working group anticipates the effects of the situation in Ukraine on the construction industry and RT's member companies. The group is responsible for cooperation with the state administration, authorities and business organizations and other key actors. The working group makes presentations about the construction industry's preparedness measures, prepares member information and responds to companies' requests for information. It reports to RT's management and board.