Capex growth has stopped at its peak

The investment activity index from the Center for Macroeconomic Analysis and Short-Term Forecasting (CMAP), which is an assessment of the supply of investment goods, stabilized at a fairly high level in September after declining in August. The center’s analysts note that the supply of basic building materials on the market has also stabilized, but this situation is not sustainable. Although the current intensity of investment activity of enterprises approximately corresponds to the highs of 2021, its indirect estimates “rather indicate a stop to previously intensive growth,” the Center for International Economic Relations concludes.

The center’s calculations based on Rosstat data indicate that in the second quarter of this year, intensive growth in investment in fixed assets continued (the first quarter was plus 2.2%, the second was 5.3%, seasonality eliminated). At the same time, in the third quarter, judging by indirect data, investments in machinery and equipment sank, the authors of the calculations indicate. In construction, the growth of investments “stuck” (second quarter – plus 0.8% on average per month, in July – minus 0.1%, in August – plus 1.5%, in September – minus 0.4%, seasonality eliminated ), and it is not yet clear whether this (taking into account the increase in the key rate) indicates a transition to stagnation or is this a one-time failure.

TsMAKP notes that the increase in the key indicator of the Central Bank brought money market rates to a level exceeding the level of business profitability for a significant number of industries. Now profitability is consistently higher only in the oil and gas sector, in the production of building materials, in the paper and food industries. The separation of rates from the profitability of even current activities demotivates investment activity, analysts note.

It should be noted that against this background, activity in the corporate lending segment stabilized in September. In annual terms, the nominal growth rate of the portfolio of loans to non-financial enterprises in August-September was approximately 24%. Lending conditions, according to company surveys commissioned by the Central Bank, continued to deteriorate in November, but the lending activity of enterprises remained high, including against the backdrop of expected demand and future government orders.

Artem Chugunov