The industrial sector never saw such an intensive reduction in the post-crisis period
First data of Gaidar Institute's business surveys on the situation in the Russian production sector in May 2013 show that the situation has been deteriorating in the sector. Enterprises had to further slow down their output, lower prices, reduce the number of employees and be very careful about their investment plans in response to further drop in sales and growth in finished product surplus stock.
For instance, evaluations of finished goods stock in the industrial sector keep signaling about sales problems and uncertainty about any real possibility to revive the demand. ‘Above normal' answers reached maximum over the last 45 months, ‘below normal' answers lessened, and ‘normal' answers kept the lead (fig. 1). However, the later have steadily been prevailing in Russia's industrial sector over the last 13 years and beyond (since March 2000), thereby giving evidence of a successful stock management policy. They kept the lead over ‘above normal' answers in the industrial sector even in January 2009 (at the height of the recent economic crisis).
With regard to output, First data on output dynamics in May look very pessimistic. The initial balance of (growth-decline) answers which is interpreted as rate of change, dropped by 7 points at once. No such a drastic decline (in May) in this indicator have been registered to date. Deseasoning showed further decline, from -7 to -16 points, according to IET's surveys (fig. 2). At first glance, the serious changes can be explained by the fact that some holidays were shifted from January to May. As a result, we saw another month being difficult for interpretation of statistic data and a reason for burst in discussions after official data on industrial production in May were published.
Reductions in headcount continued in the Russia's industrial sector in May, even more intensively. The layoff rate jumped to 13 points to reach -19 balance points during the month (fig. 3). The industrial sector haven't seen such intensity in layoffs since the crisis of 2008-2009. Moreover, even non-crisis layoffs in January seldom reached such values. Today, none of the industries performs staff recruitment, and most intensive layoffs have been reported in the machine building industry, consumer goods industry, chemical and petrochemical industries.
S. V. Tsukhlo, Phd in Economics, Head of Business Surveys Laboratory
With regard to output, First data on output dynamics in May look very pessimistic. The initial balance of (growth-decline) answers which is interpreted as rate of change, dropped by 7 points at once. No such a drastic decline (in May) in this indicator have been registered to date. Deseasoning showed further decline, from -7 to -16 points, according to IET's surveys (fig. 2). At first glance, the serious changes can be explained by the fact that some holidays were shifted from January to May. As a result, we saw another month being difficult for interpretation of statistic data and a reason for burst in discussions after official data on industrial production in May were published.
Reductions in headcount continued in the Russia's industrial sector in May, even more intensively. The layoff rate jumped to 13 points to reach -19 balance points during the month (fig. 3). The industrial sector haven't seen such intensity in layoffs since the crisis of 2008-2009. Moreover, even non-crisis layoffs in January seldom reached such values. Today, none of the industries performs staff recruitment, and most intensive layoffs have been reported in the machine building industry, consumer goods industry, chemical and petrochemical industries.
S. V. Tsukhlo, Phd in Economics, Head of Business Surveys Laboratory