Industrial production in 2014

The year of 2014 was marked by steady positive dynamics of quarterly growth rates, with changes in the impact of certain production sectors on the development pattern. As of the end of the period between January and September 2014, industrial production growth stood at 101.5% relative to the corresponding period of the previous year and was driven by the growth in mineral extraction and the recovery of positive dynamics in the manufacturing sector.

Adverse trends in the manufacturing sector were overcome in the period between January and September of 2014, and output growth stood at 2.3% compared to the corresponding period of the previous year. Industrial growth rates accelerated in Q4 2014 compared to the corresponding period of the previous year, to 102.1% compared to 101.4% in the previous year. However, a point to emphasize is that development factors changed during that period. The growth in mineral extraction in the fourth quarter saw a growth of 102.4%, production and distribution of electric power, gas and water – 104.4%, а the manufacturing sector – 101.6% of the value seen in the same period of the preceding year. Indeed, the industrial dynamics by type of economic activity in Q4 2014 was determined by the baseline indicators of 2013, but this had no strong effect on the contribution to the total industrial production growth.

As of 2014 year-end, the growth in the manufacturing sector output was 102.1% relative to the previous year, while mineral extraction was 101.4%, production and distribution of electric power, gas and water – 99.9%.

The production of food products and oil products remains the key growth drivers by type of manufacturing. The shrinking of investment demand and consumer demand in certain market segments gave rise to the contraction of output in the machine building industry. The production of ships and vessels, aircrafts and spacecrafts retained its leadership in terms of production growth rates in the machine building sector in 2014.
Given the developed inter-industry framework, the state of the motor vehicle industry remains alarming, where the output of cars and cargo vehicles contracted by 9.7% and 25.7%, respectively, compared to the values seen in 2013.

Olga Izryadnova, Head of Structural Policy Department at Gaidar Institute.