Russian industry: gradual recovery to continue

RUSSIA ECONOMICS - In Brief 16 Sep 2020 by Alexander Kudrin

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According to Rosstat, in August the Russian industry continued its gradual m-o-m recovery, therefore moving toward relatively moderate contraction of around 5.5% in 2020 as a whole. Even in the case of mining, where the oil production is still under the pressure of the OPEC+ deal, there was over 5% m-o-m growth, so that contraction last month was not as deep as in July (-11.8% versus - 15.1% y-o-y). In August, manufacturing as a whole was down by 4.1% y-o-y, which is deeper than in July (3.3%), but the difference is due to fewer working days in August 2020 compared to August 2019 (21 versus 22). The aforementioned numbers are not seasonally and calendar adjusted. As far as it concerns the seasonally and calendar adjusted figures, Rosstat reported that August was the second straight month in a row with m-o-m growth of total industrial production (mining, manufacturing, power generation, water supply, etc.).In 2020, manufacturing is heading toward contraction of around 3.5%, and the performance by various segments within manufacturing is to remain very diverse. In 8m20 and in August alone, car production was down by around 30% y-o-y, and it is hard to expect any significant improvement by year-end. A broader category, such as the production of various types of vehicles combined, was down by 21.3% in August and by 24.2% in 8m20, implying somewhat better performance in the trucks production segment. The pharmaceutical industry continues to demonstrate very strong double-digit rates of growth. Metallurgy was down by 7.8% in August and by 4.1% in 8m20 (both y-o-y), while the chemical industry was up by around 5% in both periods.Mining is set to shrink this year by around 9% ...