SERGEI TSUKHLO: “MANUFACTURERS EXPRESSED HOPE FOR A RETURN TO TRADE AND ECONOMIC RELATIONS WITH THE WEST”

The Kommersant daily has published the data of the monitoring of the Russian industry’s business environment prepared by Sergei Tsukhlo, Head of the Business Surveys Department, Gaidar Institute.
_2021d161-02-01.jpgThe business surveys’ findings carried out by the Gaidar Institute  in August point to a moderate negative momentum of demand on the back of a somewhat decrease in sales by July. This trend which started in April “now frustrates the industry because it retains output forecasts from entering the positive area and prevents sustainable output growth”, Sergei Tsukhlo notes. The share of normal estimates of demand after a downfall in March and a slight recovery in May decreased slowly: 51% against 53% in July. 
A drop in output registered by the Gaidar Institute in July after growth in June continued in August as well.  Albeit the fact that civilian products output plans have returned to growth, the period of drawdown in stocks of finished products in which the industry operated during the past 24 months and which underpinned output to warehouses seems to be coming to an end (see the chart). Estimates of materials and supplies inventories saw positive momentum, too.  With a somewhat decrease in normal provision with Russian components and basic materials (from 79% to 74%) going well with growth in provision with imported ones (from 20% to 29%), manufacturing dynamics picked up in July.
According to survey findings, for a third year running the Gaidar Institute’s respondents were reducing their ex-factory prices and their investment plans were in a deep minus. The situation can be improved if the economic situation becomes more predictable (68% of answers), the war of sanctions ends, trade and economic relations with the West resume (51%) and prices for equipment and construction and installation works decrease (50%).