In 2023, industrial production grew by 3.5% versus 0.7% a year earlier.
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According to Rosstat, in 2023 industrial production grew by 3.5% compared to 0.7% a year earlier. The Ministry of Economy expected an increase of 3.6%. The department, commenting on the results, points to the completion of adaptation to sanctions and the availability of resources for development – in 2024, industrial production there is expected to grow by 2.6%.
In the first half of 2023, the production rate reached the level of 2021, before the start of the Russian military operation in Ukraine. Since May, the indicator has consolidated on a plateau with near-zero monthly dynamics (see chart); by the end of the year, output dynamics slowed to 2.7% in December after 4.5% in November 2023. In December, compared to November, the indicator, taking into account seasonality, did not increase (in November versus October the increase was 0.3%, in October versus September there was a decrease of 0.3%).
In the industry context, the output of mining industries in 2023 decreased by 1.3% against an increase of 1.5% at the end of 2022. In December, this decline accelerated to 1.1% after 0.7% in November. The energy sector showed growth of 0.2% in 2023 (0.5% in 2022), but in December output increased in annual terms by 1.6% (a decrease of 0.7% in November). At the end of the year, the utility sector decreased output by 2.5% (after 3.2% in 2022), but in December showed an increase of 5.4% (1.1% in November). The driver of output growth remains the manufacturing industry, which added 7.5% at the end of the year against 0.3% a year earlier. Growth in processing is mainly concentrated in three sectors: mechanical engineering, metallurgy and chemical industry. However, by the end of the year, growth slowed down in processing: in December – to 5.1% after 8.9% in November.
The 2023 release largely grew on the optimism of enterprises, supported by massive government procurement for the needs of military operations, and growing consumer and investment demand. January data from the Gaidar Institute show that this optimism is declining: stagnant demand has disappointed industrialists, and they have increased excess inventories of finished products. Expectations of demand in the production of consumer goods are also decreasing (see “Kommersant” on January 23 and 26). This is partially confirmed by data from the Russian Union of Industrialists and Entrepreneurs: for the second month in a row, expectations of demand for company products are higher than the rate of its actual growth – before this it was the other way around. The RSPP business environment index indicates an improvement in the mood of industrialists, noting an increase in new orders.
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