Industrial growth - no surprises in October, while the 3Q20 GDP was above expectations

RUSSIA ECONOMICS - In Brief 17 Nov 2020 by Alexander Kudrin

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Rosstat reported that industrial output was down by 5.9% and 3.1% y-o-y in October and 10m20, while September statistics were was revised up – both in the case of mining and manufacturing. Overall, industrial statistics looked in October somewhat worse than in September. At the same time, according to Rosstat, seasonally adjusted m-o-m industrial growth was flat as Russia in October 2020 had fewer working days than in October 2020.It looks as though output in the mining sector is slowly gathering pace as in October it was down by 8.8% y-o-y, while in September contraction was deeper (9.4%). Even though oil extraction was consistently down in line with the OPEC+ deal, natural gas extraction was up by 2.7% y-o-y. Manufacturing in October was down by 4.4% y-o-y, which means that it remained almost flat if adjusted to calendar factors, such as the additional working day in October 2019. Performance remained uneven across the manufacturing sector so that some segments, such as food production, chemical industries, were steadily up during the year, while other sectors, such as oil refinery, was down. Car production was up y-o-y by 5.4% in October, but it was still down by 22.5% in 10m20. Increased production of cars supported the metallurgical industry, which was up y-o-y in October as well.In 10m20 mining sector and manufacturing were down by 6.6% and 0.3% y-o-y. As in 4Q19 industrial growth decelerated, while in November and December this year, m-o-m acceleration is not expected the results for 2020 as a whole should not differ much from the 10m20 statistics. Manufacturing is likely to remain nearly flat in 2020, while mining may be down by a bit less than 7%, which looks ...