Consumers and Industrialists Do Not Expect Improvement from the Economy // Monitoring of Leading Indicators

The results of a survey of consumer expectations in the second quarter of 2021, published yesterday by Rosstat, record an improvement in citizens’ assessments of the situation both in the economy as a whole and in terms of personal material well-being over the past three months. At the same time, there is a deterioration in assessments of the prospects for the Russian economy for the next year. As a result, the consumer confidence index, which reflects the general expectations of citizens, in the second quarter compared to the first, increased by 3 percentage points (pp) – to minus 18% (among respondents aged 16-29, the indicator, on the contrary, decreased by 2 pp. p. – up to minus 16%).

According to surveys conducted by Rosstat in May, in the second quarter, the index of favorable conditions for large purchases, as well as the same indicator for savings, actually returned to the values ​​of the pre-pandemic first quarter of 2020 (see graph). Meanwhile, from the results of FOM polls for the Central Bank, it follows that in June the share of those who believe that it is better to spend free money now on buying expensive goods dropped to 28% (by 3 pp by May), and those who believe that it is better to postpone them – increased to 51% (by 1 pp). And although the current welfare estimates continued to rise, household expectations worsened (see Kommersant, June 28).

Rosstat’s assessments of industry sentiment fully justify the expectations of the population. If in processing the index of entrepreneurial confidence, taking into account the seasonality, has not changed for a quarter (remaining in June at the level of minus 1.1%), then in production the indicator has worsened, reaching the level of November 2020 – minus 2.5%. The decline in production is the result of worsening demand estimates (they have not changed in processing). And if in processing the current assessment of the economic situation has not changed since the beginning of the year, and in production it continues to improve, reaching the pre-pandemic level in June, then in the future half a year it is expected to deteriorate in both sectors.

It is noteworthy that, compared to June 2020, the effect of almost all factors limiting industrial output (even especially significant ones – the uncertainty of the economic situation, insufficient demand in the domestic market and a high level of taxation) decreased. The only exception was the lack of skilled workers in processing, the limiting effect of which increased.

Alexey Shapovalov

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