Industrial growth remains strong in September

RUSSIA ECONOMICS - In Brief 28 Oct 2021 by Alexander Kudrin

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Rosstat reported that industrial output grew y-o-y by 4.7%, 6.2%, and 6.8% in 9M21, 3Q21, and September alone. Seasonally and calendar-adjusted industrial output grew by 1.7% m-o-m.Mining was up by 3.0%, 9.4%, and 9.5% y-o-y over the same periods. As oil and gas extraction combined was up by 0.9% y-o-y in 9M21, growth in the mining sector originated from its other segments. Coal, metal ores, and some others are among those. Meanwhile, in September alone, however, oil extraction grew by 8.1% y-o-y, while gas extraction increased by 11.7%.Similar y-o-y numbers for manufacturing looked strong also – 5.2%, 3.7%, and 4.6%. In 2021 as a whole, the industrial output may increase by over 4.5%. Production growth was seen all across manufacturing in 9M21 as both external and domestic demand remained strong. Production of selected construction materials, such as cement (up by 6.2% and 4.6% y-o-y in September and 9M21) and ready to pour concrete (up by 17.2% and 14.2% y-o-y over the same periods) indicates that construction activity remained high. Even though car production was down in September by 25.5% y-o-y, it was mainly a base effect as production of cars accelerated rapidly a year ago. In September, Russia produced over one mln cars, and in 9M21, car production was up by 20.5% y-o-y.The industry is one of the major taxpayers in Russia. Growth in manufacturing and the entire industry coincided with the fact that the tax collection was good in September. Tax collection should be on the rise in October also, as in addition to decent growth in real terms, the revenue collection should get a boost from high inflation. Evgeny GavrilenkovAlexander Kudrin