Industrial output jumped 7.2% in April 2021 amid a decline in April 2020, Rosstat reported. The result turned out to be better than expected, most likely against the backdrop of a record rise in selling prices, to which, among other things, statisticians explained a noticeable upward revision of the annual growth rate of industrial production in March 2021. The increase in output in April against March, taking into account the seasonality, turned out to be zero, and stabilized against the average monthly value of 2018. However, in May, optimism in the sector grew even more.
The growth of industrial production in April by 7.2% on an annualized basis, which was reported by Rosstat, even despite the expected jump due to the low base of 2020 (then output in April fell by 4.7%), is high. The consensus forecast of Interfax assumed growth of the indicator by 6.4%, Reuters – by 6.5%. The probable reason for such a difference between the Rosstat data and the consensus is the double-digit growth rate of selling prices in the industry (see Kommersant of May 21). This is what statistics explain the improvement in the annual growth rate of output in March 2021 (by 1.2 percentage points, to 2.3%) after receiving new data from respondents in April. “In most cases, the cost characteristics have been changed, including the volumes of shipped products in value terms for deflated types of activity,” the Rosstat explains.
To show the dynamics of the industry on an annualized basis, Rosstat calculated the release of April 2021 and by April 2019, finding its increase by 2.2%, which should have demonstrated the post-crisis recovery of the sector. But by March 2019, the index has not been calculated, which makes it difficult to estimate. Vladimir Salnikov from TsMAKP, based on the center’s calculations, notes a slowdown in output growth rates in April compared to March compared to 2019. At the same time, production accelerated due to the growth of domestic demand for petroleum products, and the dynamics in processing worsened – primarily in the production of finished metal products (earlier, Kommersant wrote about the request of the Chamber of Commerce and Industry to the Ministry of Industry and Trade to limit the rise in prices for them), pharmaceuticals, the production of rubber and plastic products and the automotive industry.
“Prices are becoming an increasingly important factor. Those who did not manage to make stocks earlier are not ready to buy at current prices, ”says Mr. Salnikov.
Surveys of industrialists from the Gaidar Institute (IEP) as of May 24 indicate: “The May growth in the deficit of finished goods took place even in the conditions of the output growth that remained in the current month. The balance (growth rate versus April) amounted to 7 points, which is slightly worse than the previous value – 9 points in April versus March. The industry … once again failed to replenish finished goods warehouses to the volumes that seem necessary to meet the expected demand ”.
According to IEP polls, the Industrial Optimism Index continued to rise in May, as did the Sector Forecast Index. However, excluding seasonality, according to Rosstat, in April, industrial production showed zero change versus March (an increase of 1.2% a month earlier) against the background of stabilization against the monthly average values of 2018 (see chart). As noted in TsMAKP, due to the crisis, the seasonality could have changed, but in April, at least a slowdown in recovery can be noted (unless, of course, in May Rosstat again doubles the output growth rate due to galloping purchase prices).