Russia Industry June 2016


Russian industrial production maintains positive footing in June

In June, industrial production increased 1.7% over the same month last year, according to data from the Federal State Statistics Service (Rosstat). June’s result came in above the 0.7% expansion registered in May and took the markets by surprise as they had expected a more timid 0.8% increase. Furthermore, the expansion in June represented the fastest increase in 18 months.

Looking at the details, the sub-categories of the industrial production index offered an encouraging picture. The all-important manufacturing sector increased a solid 1.6% annually in June (May: +0.3% year-on-year), which marked an 18-month high. Moreover, mining and quarrying—the subcategory that contains oil production—increased 1.6% in June (May: +1.5% yoy) and electricity, gas and water supply maintained a healthy pace of growth.

A month-on-month comparison confirmed the improvement suggested by the annual data. Industrial production increased a seasonally-adjusted 0.3% in June, thus recovering the ground lost in May when output fell 0.3%.

As a result of June’s increase, the trend continues to point to a slow recovery in the sector. The annual average variation in industrial production rose from minus 2.5% in May to minus 2.0% in June.

Industrial production suffered the worst contraction in six years in 2015 and this year our panel of analysts expects output to recover and expand 0.1%. The projection is up 0.5 percentage points from last month’s forecast. FocusEconomics panelists expect industrial production to increase 1.9% in 2017.

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Russia Industry Chart

Russia Industry June 2016 3

Note: Year-on-year changes and annual average variation of industrial production index in %.
Source: Federal State Statistics Service (Rosstat) and FocusEconomics calculations.

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