Russia Industrial production October 2023

Russia: Industrial output growth eases in October

Industrial output increased 5.3% in year-on-year terms in October, which was a moderation from September’s 5.6% increase. The slowdown was partly due to a deterioration in manufacturing production growth. In contrast, mining and quarrying production contracted at a more moderate rate, while output for provision of utilities rebounded. All that being said, October marked the eighth consecutive month of growth, chiefly thanls to booming military production.

On a monthly basis, industrial production decreased 0.4% in seasonally adjusted terms in October, contrasting September’s 0.3% expansion and marked the worst result since January. Meanwhile, annual average industrial production growth rose to 2.7% in October (September: +2.1%), signaling an improving trend in the industrial sector.

Commenting on the outlook, analysts at EIU said: “Although Russia has pushed towards import substitution since 2014 its industries continue to be highly reliant on imported components, mainly produced by Western manufacturers. The ban on the sale of technological goods to Russia will lead to shortages, and industries will struggle to maintain pre-war levels of production as they deplete existing stocks. […] Low external demand for some Russian goods, as well as component scarcity, will lead to productivity issues in certain industrial sectors. […] The economy will be set on a low-growth trend as sanctions and a hostile regulatory environment constrain new investment.”

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