Russian producers feel hints of recovery, though consumption continues to fall

BOFIT Viikkokatsaus / BOFIT Weekly Review 2016/29

Seasonally adjusted industrial output increased 0.3 % in June from May. Industrial output has bobbed up and down this year, and was up 0.4 % from December mainly on the June gain. Whether a solid recovery is underway will become clear in the coming months. Industrial output was up 1.7 % from June 2015, with most of the increase coming from higher crude oil production. Oil production gains were especially strong in early months of this year, but slowed as summer approached. In contrast, output in manufacturing and the electricity sector recovered with the onset of summer. Manufacturing has gained especially from food processing and chemical production both of which continued to grow. Goods transport, including pipeline transmission of oil & gas, has increased since last summer.

The volume of seasonally adjusted retail sales fell further from May to June, the 18th consecutive month of sales volume declines. Retail sales for May-June were down 6 % y-o-y and down as much as 15 % from two years ago. The drop has been very similar for food sales and non-food retail sales, even if some observers have argued for some time that a slightly larger share of food sales now goes unrecorded in statistical data. Statistical uncertainty is around as about half of the data on value-added from agricultural production is assembled by means of other type of entry methods than direct statistical reporting. Real household incomes fell again in June as inflation remained rather brisk, with consumer prices up 7.5 % y o-y. Construction activity continued a decline that started about three years ago.

Industrial output, retail sales and construction, 2009−2016
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Source: Rosstat

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