SERGEI TSUKHLO: “RUSSIA’S INDUSTRIAL CONFIDENCE INDICATOR RECOVERED”
In his interview with EADaily, Sergei Tsukhlo, Head of the Business Surveys Department of the Gaidar Institute said that the Industrial Confidence Indicator recovered in August after a dip in July.
“However, the July index value which became the worst in the current sanctions crisis is still far from the indicator’s crisis values seen in 1994, 1998, 2008 and 2020. The recovery in August became feasible owing to a positive momentum of two baseline survey-based indicators and stabilization of the other two,” Sergei Tsukhlo notes.
Specifically, the actual momentum of output – the sole indicator which is used by officials and analysts in assessing the situation in industry, but not in the international practice of calculating survey-based confidence indicators – remained in “a minus” in August.
“In other words, by enterprises’ estimates they produce less products this month than in the previous one. These actual output dynamics are quite consistent with demand’s momentum which is still quite negative,” Sergei Tsukhlo explains.
By enterprises’ estimates, balances of changes in demand remain close to the current crisis minimum and fail to demonstrate so far “a bounce-back from the bottom of the crisis.” This indicator’s improvement in August only returned it to the level of March 2022 (the beginning of the current sluggish crisis), but made a positive contribution to the momentum of the composite industrial confidence indicator.
As stated in the study, in such a situation output growth is mainly utilized by enterprises for replenishment of inventories of finished products. This enabled the Russian industry to overcome inventory shortages which emerged as far back as August 2020.
“However, it is logical that enterprises are not prepared to maintain manageable surpluses: for a second consecutive month the balance of estimates of stocks of finished products remains equal to zero,” Sergei Tsukhlo sums up.
Specifically, the actual momentum of output – the sole indicator which is used by officials and analysts in assessing the situation in industry, but not in the international practice of calculating survey-based confidence indicators – remained in “a minus” in August.
“In other words, by enterprises’ estimates they produce less products this month than in the previous one. These actual output dynamics are quite consistent with demand’s momentum which is still quite negative,” Sergei Tsukhlo explains.
By enterprises’ estimates, balances of changes in demand remain close to the current crisis minimum and fail to demonstrate so far “a bounce-back from the bottom of the crisis.” This indicator’s improvement in August only returned it to the level of March 2022 (the beginning of the current sluggish crisis), but made a positive contribution to the momentum of the composite industrial confidence indicator.
As stated in the study, in such a situation output growth is mainly utilized by enterprises for replenishment of inventories of finished products. This enabled the Russian industry to overcome inventory shortages which emerged as far back as August 2020.
“However, it is logical that enterprises are not prepared to maintain manageable surpluses: for a second consecutive month the balance of estimates of stocks of finished products remains equal to zero,” Sergei Tsukhlo sums up.