Interfax: Business confidence rises in Russian extractive, manufacturing sectors

MOSCOW. April 26 (Interfax) – The business confidence index in the Russian extractive industry grew for the third straight month in April, while the index in the manufacturing sector also grew, the Federal State Statistics Service (Rosstat) said.

The business confidence index in the Russian extractive sector improved to minus (-) 2% in April, from -3% in March, -4% in February and -6% in January 2016. The index was -5% in December, – 4% in November, as in October, -2% in September, -3% in August, -2% in July and June, -3% in May, -5% in April, as in March and February, when it rose from -7% in January 2015.

The index in manufacturing was -4% in April, -5% in March, as in February, – 7% in January 2016, -11% in December, -9% in November, -8% in October, -7% in September, -6% in May to August, -5% in April, -6% in March and February and -9% in January 2015.

In the utilities sector (electricity, gas and water) the index was -12% in April, -9% in March, -6% in February and -2% in January 2016, +2% in December, +4 in November, +3% in October, as in September, when it rose from -1% in August, -5% in July, -10% in June, from -13% in May, from -14% in April. The index was -11% in March, -8% in February and -2% in January 2015.

Rosstat said 9% of respondents surveyed thought the economic situation at their companies in April was good and 71% satisfactory in the extractive sector, and 7% and 75%, respectively, in manufacturing. The number of pessimistically minded respondents exceeded the number of optimistically respondents by 7 pp in the extractive industry and by 12 pp in manufacturing.

Around 19% and 27% of respondents from the respective sectors said they expected the economic situation to improve in the next six months. The number of optimistically minded respondents exceeded the number of pessimistic respondents by 12 pp in the extractive industry and by 18 pp in manufacturing.

Respondents reported average capacity utilization at 64% in April, and 91% of respondents thought capacity would be sufficient to meet demand over the coming six months, while 12% of them said there was surplus capacity.

Among factors constraining production growth, respondents mentioned a high level of taxation, insufficient demand for production on the domestic market and general economic uncertainty.