Page 32 - bne IntelliNews Russia Country report May 2017

production was up 9% y/y.
The increase in manufacturing output was more modest, even if the output was slightly up in the March-April period in on-year terms.
Growth in goods transport, already climbing in the first quarter, picked up steam in April . In the first four months of the year, the volume of goods transport was up 6.4% y/y. Rail transport and energy pipeline transmission, which, due to the long haulage distances, generate an overwhelming part of transport volumes, have experienced strong growth.
Preliminary figures show that production of military and civilian products by Russia's defence-industrial complex (OPK) increased by over 10 % in real terms last year , even if the pace of growth slowed from the previous three years.
Unlike the military industry, the civil industry was not spared large drops in production during the Russian economy's recession years of 2009 and 2015. Production intended for civilian use amounted to just 17 % of OPK production in 2016, down from about 45 % in the mid-2000s. Boosting OPK production by about 9 % a year, and bringing growth in OPK's civilian production to 5 % a year is the aim of the 2016–2020 OPK development programme approved a year ago by the government.
While this year's federal budget would reduce defence spending to below the 2016 level, Russia's defence ministry has pointed out that the cuts do not affect the armament programme. Prime minister Dmitri Medvedev recently noted that the share of civilian production in the OPK is intended to increase notably in the 2020s. The OPK employs about 2 million people, of which over 1.4 million work in the defence industry. Estimates put the share of OPK in Russia's total industrial output at 5–6 %.
4.3.1 Producers PMI
May’s Russian PMI release signalled stronger manufacturing growth for the rest of the year. The PMI rebounded to indicate solid growth in May, the tenth consecutive month of growth in the sector.
The seasonally adjusted IHS Markit Russia Manufacturing Purchasing
32 RUSSIA Country Report May 2017 www.intellinews.com