Investments have grown like the last time

The investment goods supply index (calculated by the Center for Macroeconomic Analysis and Short-term Forecasting, CMASF), after a sharp decline in the spring of 2022 and subsequent recovery, made a sharp jump in December and exceeded the median value of 2021 (see chart). The CMASF, however, believes that such growth is unlikely to be sustainable. “In December, in many volumetric sectoral indicators, uncharacteristic jumps have been observed over the past two or three years, followed by a downward correction. This looks like a change in the shape of a seasonal wave, but so far there are not enough observations to say for sure, ”the authors of the study note.

The crisis of 2022 turned out to be atypical in terms of the behavior of capital investments, which, judging by the data of Rosstat on GDP (see Kommersant of February 20) and indirect indicators, were growing steadily, fueled by high corporate profits and government injections. The real growth of investments in fixed assets in January-September 2022 was at the level of 5.9% in annual terms, and the pipeline transport and petrochemical industries made the main contribution to their growth. Based on the statistics on capital investments, they stabilized in the third quarter after rising in the middle of the year.

“On the one hand, high activity in construction, supported by the state, has become the most important factor in supporting the economy. On the other hand, the combination of investment stagnation and growth in construction apparently means a serious failure in the renewal of the fleet of machinery and equipment,” concludes the CMASF. This failure, apparently, has not been overcome. In December 2022 and January 2023, the output of investment goods grew noticeably, but at the same time, in January, there was a decrease in the production of machinery and equipment (9.7% compared to December, seasonally adjusted).

It should be noted that a significant share of the increase in capital investments in 2022 was provided by more expensive investment imports, which industrial companies, judging by the Gaidar Institute polls, partly continued to receive in circumvention of sanctions. “The accumulated baggage of negative effects (deterioration of the investment climate, restrictions on the import of technological goods, exit of foreign companies) will negatively affect investments at least in 2023,” Raiffeisenbank analysts believe, expecting a decline in capital investments this year.

Artem Chugunov