in April, industrial production growth accelerated to 1.7%
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In April, industrial production growth, which has been ongoing (seasonally adjusted) since February 2023, accelerated to 1.7% after 1.3% a month earlier and 0.6% in February, according to data from Rosstat. Seasonally adjusted, according to the Ministry of Economy, the growth in processing in April amounted to 2.8% (plus 3.6% in March). Metallurgy and mechanical engineering continued to make a significant contribution to the dynamics of the manufacturing industries in April (plus 2.3 percentage points), the ministry notes. Growth thanks to coal and metals has also returned to production – with the elimination of seasonality, it amounted to 1% in April against the same decline in March. The expansion of output in April is also confirmed by data from the Higher School of Economics and CMASF, which exclude the most volatile and closed industries (see chart). However, in April, according to the CMASF, the intensity of growth in comparison with March began to decline. The accelerated increase in output in 2023, we recall, is largely based on the over-optimistic expectations of companies (see Kommersant of May 10 and 22).
“The positive dynamics of sales combined with the optimism of demand forecasts allows enterprises to increase production and form quite optimistic output plans,” Sergei Tsukhlo from TsMAKP notes, citing industrial survey data in May. However, he adds, the zero-balance estimates of finished goods inventories and declining satisfaction with demand indicate uncertainty about the sustainability of the positive changes in March-May: although output plans remain at the highest level since February 2022, enterprises are not ready to fully realize them.
Rosstat also records a cautious increase in the index of entrepreneurial confidence: in production in May by 0.1 percentage points compared to April (3%), in processing – by 0.7 percentage points (3.9%). The first is associated with an increase in the share of positive assessments of current demand (from minus 7% to minus 6.5%), the second – with the expected growth in output (by 1.7 percentage points, to 27.4%). Processing managed to slightly increase the average level of production capacity utilization (by 1 p.p., to 62%), but the shortage of workers remains. The RUIE index, published yesterday, registers a slowdown in the growth of demand for both final and investment products of enterprises. If in May 35% of companies reported an increase in demand for intermediate goods, in April it was already 29%. In the B2B sector, 25% of enterprises reported an increase in the number of orders against 30% a month earlier.
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