Optimism with a view to the future

Optimism with a view to the future

According to Rosstat, at the beginning of 2024, representatives of industrial enterprises are demonstrating optimism – the index of entrepreneurial confidence in the mining sector in January increased relative to December 2023 by 2.5 percentage points (pp.), to 5%, in manufacturing industries – by 0 .9 p.p., up to 5.8%.

By the end of 2023, indicators of business confidence in the extractive industries showed a decline, including due to a reduction in production volumes, while a slowdown in growth was recorded in processing due to restrictions in the labor market. In the “On Trends” bulletin, Central Bank analysts also note a more restrained expansion of business activity at the end of the year, pointing to the dynamics of incoming flows of the Bank of Russia payment system, PMI indices and a decrease in optimism in industry, recorded by surveys of the Gaidar IEP.

The optimism of enterprises recorded by Rosstat at the beginning of the year is explained by positive assessments of the prospects for product output in the next three months. In production, the share of optimists increased from 13.4% to 19.5%. Demand estimates also fell, from minus 5.3% to minus 6.6%. In processing, the share of those waiting for output expansion increased from 28.6% to 32%.

The number of people employed (the main limiter for the expansion of production in 2023) in January is also assessed by industrialists as insufficient to implement production tasks (minus 12.9% in processing and minus 15.6% in mining). At the same time, enterprises report a decrease in the average level of capacity utilization in January: in production it was 57% after 59% in December, in processing – 61% after 62%. Industrialists’ expectations regarding financial prospects are mixed: the estimate of changes in profits in mining worsened sharply, amounting to minus 4% after 5.6% in December, in processing increased slightly – from minus 3.4% in December to minus 2.9%.

Assessments of the current economic situation in mining and processing also differ – the share of those who assess it as favorable increased in mining (from 3.8% to 5.6%), but decreased in processing (from 10.1% to 9.8 %). Those surveyed are more optimistic about the prospects for the economic situation over the six-month horizon – 9.9% of respondents expect improvements in mining and 25.7% in processing.

Diana Galieva

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