Page 49 - RusRPTApr21

fourth quarter, as the country removed the strictest coronavirus restrictions and global optimism over vaccines helped push worldwide energy prices back above their pre-coronavirus levels.
The level of utilization of production capacities in industry in February fell below 60%, experts from the Center for Business Studies of the ISSEK of the Higher School of Economics found in a poll, released on March 15, its lowest since the 2008 crisis.
The level of utilization in the extractive industries has been deteriorating for four months in a row: from 65.3% in November, it fell to 59% in February. In xe.cmanufacturing, the decline continues even longer, but with less intensity: utilization fell from 62.9% in October to 59.8% in February.
However, it is too early to panic, says Georgy Ostapkovich, director of the Center for Business Studies at the Higher School of Economics as cited by Vedomosti. January and February are traditionally not the most active months for the Russian industry.
“The signal is unpleasant, but so far it does not say anything about the economy and industry,” the Ostapkovich explains. “I am sure that already in March, the utilization of production capacities will increase and the trend will move to growth. Now, if March turns out to be in the red in terms of load, then you need to take action. "
In general, the indicator of 60% is not so bad, since the maximum load is not 100%, but 80%.
“In no case should you measure the load as 100% - this means working in two or three shifts,” explains Ostapkovich. "Therefore, the reduction to 60% is not very large."
The fall was caused by the coronavirus crisis and more growth is hindered by uncertainty about when the pandemic will end. In these conditions, enterprises are forced to adjust their plans, sacrificing primarily investments and innovations. This leads to a decrease in the utilization of production capacities.
Oil
The turnaround for Russia’s businesses was celebrated by Rosneft CEO Igor Sechin in a boast to President Vladimir Putin about his company’s performance during a recent meeting — an almost unthinkable prospect 12 months ago as oil prices crashed below $20 a barrel.
“In contrast to a number of the other major international oil and gas companies, including ExxonMobil, Chevron, Shell and Total, which ended the year with losses, we were the only global company that was profitable,” Sechin told Putin in a face-to-face meeting last month.
49 RUSSIA Country Report April 2021 www.intellinews.com