Monitoring of the situation in the industry - July 2014

Result of the development of the industry in July 2014 Index IPEM-production is 0.5%, the index IPEM-demand - 3.5% (in July 2013).

For the period January-July 2014 the index IPEM-production fell by 1.4% compared to the same period last year. IPEM-demand index also declined, falling from the beginning of 2014 – it was 1.8%.

Calculation of the index IPEM-demand in the context of industry groups shows that a marked increase is observed only in low-tech industries (1.7% compared to July 2013; 4.3% YTD). Demand growth in the extractive industries in May and June gave way to fall in July (-2.7% compared to July 2013, -0.6% YTD). By industry producing goods investment demand has been a steady drop in demand, both in medium-tech (-1.8% in July, 1.3% in January-July), and in high-tech (-18.9%, -16.7 %).

Electricity consumption in July 2014 in Russia as a whole increased (+ 0.5% compared to July 2013) at the lower monthly temperatures (see. Slide в„–9). From the beginning, energy consumption fell by 0.9% over the same period of 2013, with daily maximums of power consumption in July continued to grow (+0.8% in the corresponding month of the previous year). Thus, on the basis of the trend in July 2014 related to changes in the roles of different consumers in the energy saved. Recall that the maxima of the power consumption rose for the third consecutive month (+0.2% in June, 2.3% in May). Thus, the non-uniformity of daily schedules of the power consumption increases with a decrease in electricity consumption, hence the share of industry in the electricity balance is reduced and consumption shifts to the non-industrial sphere (population, commerce, services, electrified transportation).

Current results and near-term prospects of the Russian economy in general and industry in particular increasingly depend on the constraints imposed by foreign countries on various sectors of the Russian economy. Every month, the impact of endogenous factors is weakening, and exogenous - on the contrary, is growing. Steady decline in oil production rose this year from 1.6% in January to 0.4% in July, (see. Slide в„–8). Moreover, contrary to the accident at the Achinsk refinery modernization program and implemented in many other refineries modernization, the volume of processed crude oil in the country grow. The negative dynamics of FEC associated only with a stable reduction in exports (except for the coal industry).
 
Obviously, in light of the response constraints, the Russian industry a chance for an additional (compensatory) growth associated with the implementation of import substitution programs, but the process for most of the sectors will be significantly extended in time. Much more immediate effect will be done by a possible additional price increases in sectors oriented to consumer demand.