Russian output recovers, but consumption slump drags on

Industrial output in November-December 2016 rose by about 3 % y-o-y. Growth was slightly over 1 % for all of 2016. Rosstat noted that its full-year data for 2016 include the largest changes that firms in its reporting system have submitted. The published figures for earlier periods of 2016 may change, as could the seasonally adjusted data that show a notable rise in industrial output in November-December.

Output of mineral extraction industries, which includes fossil fuels, was up on-year in November-December by nearly 3 % and 2.5 % for all of 2016. Most of the gain could be attributed to higher oil production. Manufacturing output in November-December increased 2.5 % y-o-y, but showed hardly any growth for the whole 2016 from 2015.

Agricultural production in 2016 exceeded the previous year's output by nearly 5 %, thanks largely to bumper harvests. The volume of goods transportation rose by nearly 2 %. Construction activity fell for the third year in a row. The decline was nearly as steep as in 2015 (down over 4 %). Unlike earlier years, fewer apartments were built. Measured by the number of apartments completed, the drop was 1 % from 2015. In terms of floorspace, the decline was over 6 %.

The seasonally adjusted volume of retail sales dropped still in December, extending the slide to two years. The on-year decrease in 4Q16 matched the fall for the full year, i.e. about -5 %. Retail sales in 2016 were 15 % below their 2014 level. Real household disposable incomes fell 6 % last year.