Russia: After modest expansion in February, industrial output contracts again in March
April 15, 2016
Following a modest rebound in February, industrial production contracted again in March. Nonetheless, the decrease was milder than markets had expected. Data from Rosstat showed that industrial output decreased 0.5% year-on-year in March, which swung from the 1.0% increase registered in February, but marked, nonetheless, a softer drop compared to the 1.0% decrease the markets had expected.
Looking at the details, while manufacturing production in March decreased for a 15th consecutive month, mining and quarrying expanded for a fourth consecutive period. An irregularity observed in March was a strong 5.3% increase in production of oil and gas, which marked an unusual deviation from the 2.1% increase provided by the Ministry of Energy. The reading contributed to the expansion registered in mining and quarrying in March and came in, curiously, after the Doha meetings.
A month-on-month comparison showed that industrial production expanded a seasonally-adjusted 0.4% in March, which came in above the revised flat figure registered in February (previously reported: +0.1% month-on-month).
Despite March’s decrease, the trend continues to point to a slow recovery in the sector. The annual average variation in industrial production inched up from minus 3.5% in February to minus 3.4% in March.
Author: Ricardo Aceves, Senior Economist