1) The Russian natural stone market has become very price sensitive now, and except for the premium private homes segment of the market, buyers now looks around for the lowest price. The devaluation of the rouble has made imported stone much more expensive. Before the economic slowdown in 2014, the strong rouble and a fast growing economy meant that there was a market for natural stone in all different price segments. In the machinery segment of the industry the investments currently taking place tend to be of the cheaper kind and not the sophisticated upmarket processing and elaboration machinery bought before by Russian companies.
2) The new economic situation has also meant that local factories processing Russian stones are doing better than ever and many have been even increasing their production capacity. The local stone mining and processing industry was previously not competitive against foreign suppliers when the rouble was strong. The Russian economy has finally stabilised during 2017 and the economy is expected to grow this year by 1.5% after serious economic decline during last 2 years. However, businessmen are not expecting a return to the booming times any time soon.
3) One element of the slower growing Russian economy and a weaker currency is Russian stone companies are searching for new quarries to exploit inside the vast country as substitute for imported materials. In government projects, for paving stones, kerbstones, urban renewal projects etc. the regulations are that materials must be from Russian quarries.
4) The suppliers of premium priced stone for luxury private projects, mostly foreign companies, have not seen significant decline in their business, and this small and exclusive segment of the market in Russia has remained relatively stable. This premium segment may even be seeing some growth during 2017, from comments made by suppliers of the expensive stones.
5) The number of projects, defined in terms of private homes, has seen a small increase compared to the last 2 years. Previously, when the home owners would be offered different alternatives by their stone suppliers they would approve very fast without bothering too much about price, now they look around for cheaper prices everywhere before making a decision. The decision making process has become slower.
6) The building of extravagant office buildings or shopping malls has, expectedly, suffered a sharp decline in the new economic environment. This segment of the market was where, frequently, high prices natural stone was used in huge quantities in floorings and interior decoration, as any visitor to the malls would have noticed.
7) Overall, stone companies from Europe, Asia and elsewhere, supplying slabs, tiles and cut to size in granite and marble, for whom Russia was one of their most important markets and which collapsed overnight, have noticed that Russian buyers are slowing coming back and visiting their suppliers, and at least starting to purchase in modest quantities.