The industry is filling warehouses – Newspaper Kommersant No. 19 (7464) dated 02/02/2023

Rosstat recorded a slight decline in industrial output in 2022. Support to the sector, provided in the second half of the year by government orders, accelerated growth in the military-industrial complex and related industries. However, at the end of the year, both the civil processing industries and the sub-sanctioned production of oil and oil products grew noticeably. The former were most likely restocking and their sustained growth in 2023 is unlikely. The prospects for the latter are less certain.

In 2022, compared to 2021, industrial production decreased by 0.6%, appreciated Rosstat. Processing output decreased by 1.3%. The Ministry of Economy comments that the main positive contribution to the dynamics of processing at the end of the year was made by metallurgy, including finished metal products. Export oriented industries chemistry, production of coke and oil products, woodworking – “restrained the dynamics”, that is, they were reduced. grew rapidly pharmaceutical industry (by 8.6%) and was also rapidly declining mechanical engineering (by 8.6%), which “had the greatest impact from external restrictions,” with the exception of the production of computers, electronics and optics, as well as machinery and equipment, where growth was recorded at the end of the year by 1.7% and 1.9% respectively. Production increased by 0.8% due to crude oil and gas.

As Kommersant noted at the end of 2022, a slight increase in the military-industrial complex and related industries (computers, electronics and optics) largely compensated for the decline in output in civilian industries (see “Kommersant” of December 29), which allowed the industry to show a slight growth month by month, seasonally adjusted (0.8% in November). In December 2022, the situation as a whole even worsened a little – and according to Rosstat, the issue volume remained at the level of November (plus 0.1% seasonally adjusted). The Ministry of Economy calls this “an improvement in dynamics”, pointing to minus 0.1% in processing and plus 0.2% in production by November in December.

Meanwhile, according to CMASF estimates, recovery in industry continued in December, but from a noticeably lower level than that of Rosstat (see chart). Output grew by 1.1% versus November (seasonally adjusted). The discrepancy in the estimates of the center with Rosstat is primarily due to the exclusion of closed positions from the calculation of the index. “In November, the main increase in general industrial output was due to an increase in the extraction of energy minerals, in December the range of industries that increased output expanded significantly,” the authors of the calculations note. They detect an increase in oil production, despite the export restrictions introduced since December 5, by 0.4% versus November after an increase of 1.1% in November versus October (seasonally adjusted), production of petroleum products (by 1.7% versus November), close to the historical maximum, and continued active growth in coal production (3.5% against November after an increase of 4.6% in November against October), once again updating it. In addition, there is a surge in output in the automotive industry (by 24.6% compared to November), but from a very low level (December output was 43.3% lower than in February, seasonally adjusted) and continued growth in the production of metal products (by 6 .9% after 5.5% in November).

“This is not about weapons and ammunition. Rapid growth is taking place on a broad front: in the production of building metal structures, metal tanks and reservoirs, steam boilers, cutlery and cutlery, and tools,” note the authors of the calculations.

In addition, a long-term decline in woodworking output stopped in December and growth in food production continued due to “a pre-New Year jump in domestic demand in the context of limited pre-New Year outbound tourism”. Against this background, a decrease in gas production (by 1.1% compared to November) was recorded after a three-month recovery growth, an acceleration in the decline in the production of building materials and a local decline – after a long recovery – in metallurgy and chemistry.

January 2023 The leading indicators of the state of affairs in the industry of the Gaidar Institute and PMI S&P Global, as well as the loading of industrial cargo by Russian Railways, did not indicate a noticeable improvement in the affairs of the industry, fixing near-zero output growth rates and a smaller-than-expected demand growth. At the same time, the rapid growth in the output of manufactured goods not related to the military-industrial complex at the end of 2022 can be explained by the replenishment of stocks by companies. “At the beginning of 2023, the industry again began to restore stocks of finished products,” the Gaidar Institute notes, although the shortage of stocks of finished products persists for the second year in a row.

Artem Chugunov