Sergey Tsukhlo, Head of the Business Surveys Department at the Gaidar Institute, in an interview with EADaily spoke of the problems faced by the Russian industry as a result of the sanctions imposed by the West.
The less than impressive movement pattern of actual demand coupled with the lack of positive sales forecasts in Q2 2022 was disappointing for Russian industry and translated into a negative adjustment of output plans. These were the analytical data released by Gaidar Institute experts.
“The main “beneficiaries” of the actual output growth in June were not buyers, but warehouses of finished products. And warehouses of raw materials are experiencing the greatest shortages of imports in the food industry (79% of enterprises) and light industry (70% of enterprises),” Sergey Tsukhlo explained.
In June, as noted by Gaidar Institute experts, Russian producers, in the hope of pushing up weak demand, decided not to raise their selling prices, switching over instead to their absolute reduction. During that month, the balance of expected price changes broke two local lows, those of 2019 and 1998. At the same time, the chronic shortage of personnel has been forcing Russian industry to recruit workers even amid the protracted crisis caused by the sanctions.
The June sales were such that the share of “below normal” estimates rose to 39%, which, according to the researchers, can be explained by the lackluster movement pattern of demand over Q2 2022. And the demand forecasts for May-June failed to demonstrate a continuing recovery after the April rebound.
“In the June questionnaire, we asked the enterprises to evaluate separately the availability of Russian components and the supply of imported ones,” Sergey Tsukhlo said. “The supplies of Russian components turned out to be better, which was only logical. At the end of Q2 2022, it was rated to be normal by 71% of industrial enterprises, against 31% in the case of imported ones. 22% of enterprises reported a shortage of Russian raw materials, and 51%, of imported raw materials.
As for lending to industry, the recovery of business loans for Russian industry to the normal availability level continued in June, climbing to 50%.