in the summer the investment activity index practically stopped growing

According to the latest macroeconomic monitoring of the Center for Macroeconomic Analysis and Short-Term Forecasting (CMAKP), in the second quarter of 2023, capital investments grew rapidly (the first quarter – plus 2.2%, the second – plus 5.3%, seasonality eliminated). However, after reaching a historical maximum in June-July, the investment activity index (an assessment of the supply of investment goods in the economy), calculated by the center, practically stopped growing (see graph).

This happened mainly due to the stabilization of the supply of machinery and equipment. Let us note that the Central Bank’s DIP calculations, published in the October issue of the “What Trends Are Talking About” bulletin, record that this trend continued in August – in some of the most “heavy” industries of the investment group (production of “finished metal products, except machinery and equipment” and “other vehicles and equipment”, which have the greatest weight in the structure of the investment group’s added value), in the interpretation of Central Bank analysts, stabilization is visible, and in the rest – a decrease in output. In construction, after a long period of intensive growth (April – plus 1%, May – 2.3%, seasonality eliminated), a correction has emerged (June – minus 1%, July – minus 0.2%), as recorded in the Center for MACP. “For now, this is purely “pendulum” dynamics. The next couple of months will show whether there is a “real” decline behind it, or just a slowdown,” the center’s analysts note. The supply of basic building materials is still increasing, but the pace of this increase slowed down significantly in July (while both of these indicators recorded historical highs in July).

Note that September surveys of industrialists by the Gaidar Institute (IEP) also show that companies’ investment plans in August-September were losing optimism after reaching a local maximum in July: to increase capital investments, 64% of IEP respondents need a strong ruble. TsMAKP notes that in the set of technical problems (including increased competition for workers and cost inflation) limiting the investment activity of Russian companies, another one has appeared. “The increase in the key rate that has already taken place has brought money market rates to a level exceeding the profitability of business in some industries (mechanical engineering, woodworking),” the center’s analysts record.

Artem Chugunov