SERGEY TSUKHLO: INDUSTRY DEMOSTRATE MORE DESIRE TO OVERCOME STAGNATION
Sergey Tsukhlo, Head of IEP Business Survey Department, commented data of the May survey of industrialists to “Economy and life” periodical.
Dynamics of processing industry became negative, i.e. -1% year-over –year) in the last month of spring after a confident growth a month earlier, i.e 4.7%. However, calendar factor contributed in a certain way to deterioration of dynamics in processing industries compared to April.
Nevertheless, the May data of survey organized by the Institute of Economic Policy named after Egor Gaidar proved that demand growth rate was at the same level as in April. However, estimation of current demand, data of top enterprises demonstrate growth of satisfaction with sales up to 65%.
Sergey Tsukhlo, Head of IEP Business Survey Department, commented the situation as follows: “Anticipated demand gained such optimism which has not been registered since 2018. Industry demonstrate ever increasing desire to overcome stagnation started for them in 2012”.
An important detail is that industry started to reduce their retail prices in May, thus, providing a signal that the phase of transfer of the new VAT rate into prices has been completed. Price assumptions of enterprises for five months reduced by 36 p, and achieved 6 p. at present, i.e. companies are prepared to reduce prices already in the next months of 2019. Such a powerful reduction of prices has not been forecasted by Russian industry since December 2008.
Sergey Tsukhlo noted that “level of optimism in relation to production plans of enterprises is still relatively high. Such a level has not been reached since end of 2017. Keep in mind that this optimism is not only high but surprisingly stable for recent years”.
Nevertheless, the May data of survey organized by the Institute of Economic Policy named after Egor Gaidar proved that demand growth rate was at the same level as in April. However, estimation of current demand, data of top enterprises demonstrate growth of satisfaction with sales up to 65%.
Sergey Tsukhlo, Head of IEP Business Survey Department, commented the situation as follows: “Anticipated demand gained such optimism which has not been registered since 2018. Industry demonstrate ever increasing desire to overcome stagnation started for them in 2012”.
An important detail is that industry started to reduce their retail prices in May, thus, providing a signal that the phase of transfer of the new VAT rate into prices has been completed. Price assumptions of enterprises for five months reduced by 36 p, and achieved 6 p. at present, i.e. companies are prepared to reduce prices already in the next months of 2019. Such a powerful reduction of prices has not been forecasted by Russian industry since December 2008.
Sergey Tsukhlo noted that “level of optimism in relation to production plans of enterprises is still relatively high. Such a level has not been reached since end of 2017. Keep in mind that this optimism is not only high but surprisingly stable for recent years”.