Sergey Tsukhlo, Head of Business Surveys Department at the Gaidar Institute, released the June industrial optimism index, which showed a symbolic decline after 7 months of growth. The results of the survey were published by Kommersant.

However, other forward-looking industry indicators showed a decline back in April-May 2023. According to the author of the study, the slight decrease in June (2 p.p.) indicates only a stagnation in growth, noting that the index values in May and June remain the best since March 2022.

Enterprises' sentiments are corrected due to the suspension of the positive dynamics of the demand, whose balance of actual changes dropped from +6 p.p. in May to +4 p.p. in June. However, it means the maintenance of the sales growth with even more intensity than in 2011-2020. According to the research data, the share of normal sales estimates increased to the crisis maximum of 75%, while the share of "below normal" estimates decreased to 21%.

  “Apparently, the Russian industry has adjusted their ideas about possible dynamics of sales and, therefore, production during overcoming the consequences of the prolonged “sanctions war”," believes Sergey Tsukhlo, the author of the estimates.

The forecasts of the output lost 8 p.p. in June, but remained “in the plus.” The industry is ready to continue to increase the output, but not so intensively as it was planned in March-May 2023. The adjustment of demand and output expectations in H2 2023 resulted in revised estimates of finished goods inventories. The “above-normal”-“below-normal” balance increased by 9 p.p. and reached a “pre-covid” level of redundancy (see chart).

 “The first data on the dynamics of output in June may disappoint consumers of the traditionally limited set of indicators of official statistics, which judge the situation in this most important segment of the Russian economy mainly by the Rosstat index of industrial production.

If its publication at the end of July confirms the results of the current enterprise survey, then we may face the June slowdown of the sub-sanctioned output growth, which so fortunately and somewhat unexpectedly started in March 2023," concluded Sergey Tsukhlo.