Page 39 - RusRPTJul20

The uncertainty over dynamics of output in manufacturing is high, and the range of factors affecting it is broad – from the pace of the recovery of consumer demand to the extent to, which the government remains committed to the implementation of the national projects, the extent to, which economic uncertainty has hit the propensity to invest, export dynamics, and more.
However, what the data show is that, despite May being non-working like April, manufacturing improved to -7.2% y/y from the previous -10% y/y, with broad-based recovery reported in 17 out of 24 industries within manufacturing, especially in the production of metal products (-1.1% y/y in May vs. -30.5% y/y in April), electronic & optical equipment (-10% y/y vs. -26.7% y/y), machinery & equipment (​‐​3.1% y/y vs. -12% y/y), furniture (+2.2% y/y vs. -24.6% y/y) etc.
The industries, which weakened the most in May were food production (+1.5% y/y in May vs. +3.7% y/y in April) reflecting April's retail sales hit by the lockdown measures; petroleum products manufacturing (-4.1% y/y vs. +0.7% y/y) absorbing contraction in crude oil extraction, as seen in the output of primary oil refining (-4% y/y vs. +0.5% y/y); basic metals production (-10% y/y vs. -7.1% y/y), etc.
That said, we expect industrial production to recover by 4Q20, and will total a -(2.5-4)% y/y contraction for the full year.
Consumer business were hurt the most. ​Obviously the lockdown hit those business that rely on commerce with people the most. Breaking down the pressure on services Sberbank found that food services, which includes restaurants, cafes and bars, saw sales plunge 51.5% y/y in April, despite the boom in delivery and takeaways. The segment was also hurt over the first four months, contracting by 11.1% y/y.
A breakdown of these services showed culture and tourism services dropped by 96% y/y in April, hotels and accommodation by 89% and transport by 65%. Communication, housing and utilities were less affected, down 4.0% y/y, 7.2% and 10.3% respectively in April,” Sberbank CIB said in a note.
39​ RUSSIA Country Report​ July 2020 ​ ​www.intellinews.com