Industry posts steady growth in 2M24

RUSSIA ECONOMICS - In Brief 28 Mar 2024 by Evgeny Gavrilenkov

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Rosstat reported that in February and 2M24, the performance of the Russian industry looked not too bad, as the industrial output grew y-o-y by 8.5% and 6.6%. To some extent, faster y-o-y growth in February stemmed from additional working days (due to a leap year). However, it looks like it is not the only factor. Rosstat also reported that seasonally/calendar-adjusted industrial output increased by 1.5% m-o-m - following a 0.2% m-o-m contraction in January. The mining segment posted 2.1% and 1.4% y-o-y growth in February and 2M24. The manufacturing grew by 13.5% and 10.6% y-o-y over the same periods. These numbers suggest in 2024, manufacturing output may increase by nearly 8%, while the mining segment may deliver positive growth (as opposed to a 1.3% contraction last year). Industry, as a whole, may grow between 4.5% and 5.0% in 2024 – even though budgetary spending will moderate following generous financing in 1Q24. To some extent, the situation may look similar to that of 2023, when the government allocated significant amounts of certain expenditures ahead in 1Q and turned less generous in the rest of the year. The industry grew across the board (apart from oil products and coking coal). Note that the government stopped publishing statistics on oil extraction. Production of computers, electronics, and optical equipment grew 50.6% y-o-y in 2M23. The production of vehicles was up by 43.0%. These were among the fastest-growing aggregate segments. Many other segments (including consumer-oriented) posted double-digit growth – even the timber and woodworking segment (hit by sanctions last year) grew by 10.9% y-o-y in 2M24. The metal-working segment (excluding machinery an...