ROSSTAT: BUSINESS CONFIDENCE FALLS IN ALMOST ALL SECTORS OF THE ECONOMY

24th October 2013

Federal state statistics service (Rosstat) has presented data showing that the business confidence index which reflects the aggregated status of entrepreneurial behavior falls in all sectors of Russian economy, except of the extraction of useful minerals, but there it is not growing also.

Federal state statistics service (Rosstat) has presented data showing that the business confidence index which reflects the aggregated status of entrepreneurial behavior falls in all sectors of Russian economy, except of the extraction of useful minerals, but there it is not growing also.

Worst of all is the processing industry where the total index was minus 5%. In September this figure was minus 3%, in August – minus 1%; until then fluctuated around zero.
Mining also went into the negative zone – it took minus 2% in October, in September this figure was 1%, up to this April stood at 4%.
Organizations involved in the production and distribution of electricity, gas and water index of business confidence rose to 9% from 8% in September (the upcoming heating season), but if we exclude the seasonal factor, it is there also decreased from minus 2% to minus 4%.

The share of pessimistic in regard to the assessment of the current economic situation respondents in the mining industry exceeds the share of optimists 6 percentage points and 4 percentage points – In the processing industries.
The main reason is no demand.
According to leaders, in October 2013, the balance of assessments by respondents in demand for production (portfolio) in extractive industries amounted to minus 19%, in manufacturing – minus 34% (a year ago, these indicators amounted to minus 8% and minus 21%, respectively).

The average level of capacity utilization, according to the assessment of the respondents, in October amounted to 63%. 92% of respondents believe that their capacity will ensure the satisfaction expected in the next six months the demand for products, and 10% of them indicate the redundancy of the existing facilities.

The high level of taxation, as well as a poor demand abroad prevents increase production in mining. Low demand interferes with the development of processing.
Business confidence index published by Rosstat on the basis of a monthly survey of several thousand of large and average industrial enterprises of Russia.

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