Russia's industrial production declines 0.7% y/y in July.

By bne IntelliNews August 15, 2013

Industrial production declined by 0.7% y/y and increased 0.9% m/m in July, the data by RosStat shows. In March and April, the indicator posted 2.6% y/y and 2.3% y/y growth, respectively, but then dived by 1.4% y/y in May and inched by 0.1% y/y in June.

In Jan-July overall, industrial production remained stagnant at 0% y/y vs. 3.2% y/y growth seen for the same period of last year.

June’s and July’s industrial production was expected to bounce slightly from a decline in May. However, poor external demand, weak domestic spending and stalled investment contributed to expectations of poor growth and prolonged stagnation.

In July, only extraction industries posted growth of 0.4% y/y (slowing notably from 3.1% y/y in June). Manufacturing and utilities industries contracted by 1.5% y/y and 1.8% y/y respectively. In Jan-July 2013 overall, manufacturing was down by 0.2% y/y, utilities contracted by 0.8% y/y, while extraction inched up by 0.9% y/y.

Oil extraction gained 0.7% y/y, natural gas extraction declined by 0.4% y/y, and coal mining remained flat y/y in Jan-July.

As reported, HSBC Markit-compiled the manufacturing PMI also declined in July below the no-change mark of 50.0 to 49.2. This is the first time the indicator has a negative reading since August 2011 and the lowest value since December 2009. The index was lower than 50.9 expected by the Bloomberg survey.

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