Industrial output growth gathers pace in May and 5M21

RUSSIA ECONOMICS - In Brief 23 Jun 2021 by Alexander Kudrin

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Rosstat reported that Russia’s industrial output was up by 11.8% and 3.2% y-o-y in May and 4M21. Even though, according to the tradition, Rosstat revised up previously reported data for April seasonally adjusted (by Rosstat) industrial output grew by 1.1% m-o-m in May. Mining was still down in 5M21 (by 2.3%) but was up by 12.3% in May (both figures are y-o-y). Manufacturing increased y-o-y in May by 11.4% and by 6.0% in 5M21. As there are strong base effects, both mining and manufacturing are heading toward a mid-single-digit rate of growth in 2021 as a whole.The oil-and-gas extraction segment was up by 11.7% in May, but down by 4.7% y-o-y in 5M21. Food production as a whole increased by 4.8% and 1.5% in May and 5M21. Textiles, clothing, pharmaceutical, metalworking, machinery saw strong double-digit growth in both periods – in some segments over 20%. Car production grew by a factor of 2.2 in May and by 51.4% in 5M21.Demand from the Russian Railways was uneven and production of passenger railroad cars was down, while production of freight railroad cars increased. Production of various types of locomotives was also not even. Production of some food products, such as vegetable oil, fish and seafood, poultry, also decreased. All quotations are y-o-y as well.What is also seen clearly from statistics is that production of various types of construction materials gathers pace fast, which implies that construction and investment may be strongly up in 2021, i.e., possibly above GKEM Analytica’s expectations.Evgeny GavrilenkovAlexander Kudrin