Interfax: Russian business confidence continues to fall in November – Rosstat

MOSCOW. Nov 25 (Interfax) – The business confidence index for the Russian extractive sector negative (-) was 3% in November, down from -2% in October and -1% in September and 4% for the five months prior to that, the Federal State Statistics Service (Rosstat) said.

In the manufacturing sector, the index was negative (-) 6% in November, down from -5% in October, -3% in September and -1% in August.

In the electricity, gas and water production and distribution sector the index was positive 9% in November, as in October, up from 8% in September and 2% in August.

Rosstat said 9% of respondents surveyed thought the economic situation at their companies was good and 74% satisfactory in the extractive sector, and 10% and 76%, respectively, in manufacturing. The number of pessimists exceeded optimists by 7 pp in the extractive industry and 4 pp in manufacturing.

Around 21% and 26% of respondents from the respective sectors said they expected the economic situation to improve in the next six months, 10 percentage points and 17 points more than thought the situation would deteriorate.

Respondents reported average capacity utilization at 64% in September, and 92% of respondents thought capacity would be sufficient to meet demand over the coming six months, while 11% of them said there was surplus capacity.

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

The business confidence index is a qualitative indicator based on management reports concerning forecast output, inventories and demand in three basic industries – subsurface resource extraction, processing and electricity, gas and water production and distribution – that anticipates shifts in economic variables. Small business is excluded from the calculation. The indicator is the arithmetical “balance” of the responses to the survey questions concerning expected output and actual demand less current inventories of finished product. The balance of expected output indicates the variation among producers noting an increase or decrease in output. The balance of actual demand less current inventories indicates the variation among producers noting a level above or below normal.