Industrial recession in Russia accelerated sharply

During the month, the industrial production index fell by 5.9% in annual terms, this is by 2.3 percentage points. below the September figure, according to Rosstat data.

Since the summer, the industry has gradually emerged from the "pandemic" crisis, slowing down the pace of decline. There, in May the figure was 7.9%, in June - already 7.1%, then in July - 5.9%, 4.2% in August and 3.6% in September. But in October, the sectors, key for the economy, were again in recession.

Note that the decline in mining accelerated from 8.8% in September to 9.4%.

The oil refining and production sector continues to be influenced by the OPEC + agreement, which requires the Russian Federation to reduce production by almost 2 million barrels per day compared to 2019.

According to Dmitry Polevoy, Innovation Director at Loko-Invest, the demand for raw materials is falling again as the world is covered by the “second wave” of the coronavirus pandemic, key buyers of Russian hydrocarbons in the European Union are introducing quarantine measures.

At the beginning of November, the Russian Federation pumped 11.2% less oil than in 2019, and produced less coal by 11.6%. The growth of metal ore production - by 1.1% - and gas - by 2% turned out to be insufficient to compensate for the failure.

In this regard, the domestic demand is showing a collapse, and the manufacturing sector is showing a dive. According to Rosstat, in the third quarter of 20200, it was still possible to get out of the recession, but the way out was scanty: the growth was only 0.3%.

In October, factories, factories not connected by a raw pipe, showed a collapse of output by 4.4%. Production volumes in metalworking (-27.4%), computer and electronics production fell by 15.5%, leather and fur - by 15.1%, and refinery utilization - by 10.6%.

On the other hand, import substitution turned out to be positive. As well as production focused on consumer demand in general. Thus, the production of textiles increased by 11.5%, furniture by 9.7%, foodstuffs by 1.8%, and straw and plaiting materials by 7.6%.

Let us note that car production in Russia fell by a quarter. At the same time, sales of passenger cars in Russia in October increased by 7% compared to the same month last year.