In August 2021, according to Rosstat, taking into account the seasonality, industrial production in the Russian Federation decreased for the third month in a row, even despite the positive adjustment of these statistics. The reasons are the exhaustion of deferred demand, interruptions in the supply of components and high cost inflation. The effect of these factors is especially significant for processing and will persist in the near future.
The statistics of industrial production in August 2021 turned out to be expected (see Kommersant from August 26) weak. Even in comparison with the corresponding period of 2020, comparison of the dynamics of output with which is still not very informative, one can observe a noticeable slowdown in its growth rates – from 10.2% in June and 7.2% in July (the estimate for this month has traditionally been increased by statistics – by 0.4 percentage points due to receiving actual data from companies), to 4.5% in August 2021. In comparison with the pre-pandemic indicators, the picture looks even sadder: compared to August 2019, industrial growth slowed down to 0.5% after 1.1% in July and 2.8% in June. The trend reversal, according to Rosstat, was also outlined in comparison with the monthly average values of 2018 – taking into account the seasonality in August 2021, the industry showed the worst result since March, increasing output by only 5%.
Against this background, the intra-annual dynamics of industrial production has become confidently negative. Taking into account the seasonality, monthly output has been declining for the third month in a row, and the rate of its decline has increased from 0.3% in June and 0.1% in July to 0.8% in August. A similar estimate (minus 0.7%) of the decline in industrial production was made at CMASF. “The fall is actually frontal. Only pharmaceuticals grew against the background of the ongoing epidemic, oil refining against the background of weakening restrictions on internal mobility and the production of products for railway transport for unknown reasons, ”says the center’s expert Vladimir Salnikov.
Among the factors that led to a decrease in production, Mr. Salnikov singles out the end of the implementation of powerful deferred demand and the forced transition of citizens from the consumption of services to the consumption of goods, interruptions in the supply of components (one of the latest examples is car manufacturers), as well as ultra-high cost inflation, which affects processing companies. “Sluggish prospects are not encouraging. In the next two or three months, these factors will continue to have a negative impact on the sector, and how much cost inflation will be spinning up is unclear. At the same time, costs are growing, and demand is shrinking, ”says Mr. Salnikov.
In August, according to Rosstat, the growth in producer prices slowed to 1.5% from 2.6% in July (in annual terms, jumped to 28.6% from 28.1% against the background of a low base), and in processing and production – up to 0.6% from 2.3% and up to 3.5% from 3.6%, respectively. “The key factor that influenced the decline in the growth rate of the index (producer prices .— “B”) – a decrease in the cost of metallurgical products recorded by Rosstat in August (for the first time this year). The last time a decrease in prices for metallurgical products was noted in July 2020. In general, a 3% decrease in prices was noted in metallurgy over the month, ”said Viktor Yevtukhov, deputy head of the Ministry of Industry and Trade yesterday, noting that this is the result of the introduction of export duties on metals and the volatility of world prices in metallurgy.
However, as evidenced by the recent results of a survey of companies’ price expectations for the next quarter by industry, based on September polls, published by the Bank of Russia, in processing, expectations remain record high, as in the previous four months, while in production they have dropped sharply; which of these trends will prevail will be shown in the coming months.