BOFIT Viikkokatsaus / BOFIT Weekly 2018/32

Manufacturing output continued to rise in the first half of this year in almost all federal districts, even if the pace of growth varied somewhat. Manufacturing growth in the Central Federal District hit 10 % y-o-y, followed by growth in the range of 5−7 % in the Northwest, Urals and Southern federal districts. Manufacturing output has risen in federal districts through the general 2015−16 recession, with the exceptions of brief dips in the Siberia and Far East federal districts.

Retail sales, which began to recover last year, continued to improve in the first half of this year in nearly every federal district (up 2−4 % y-o-y). As a consequence of recession declines, however, the volume of retail sales in almost all federal districts has yet to reach pre-recession levels. For example, retail sales volumes were still 10 % below the 2014 level in the Central Federal District and 5 % down in the Northwest Federal District.

The gradual shift in retail sales from the City of Moscow to its surrounding Moscow region in the Central Federal District has continued for years. Retail sales in the Moscow region well exceeded the pre-recession level in the first half of this year. Moscow and the Moscow region constitute a mega centre of retail activity, with a third of all retail sales in that mega concentration taking place in the Moscow region.

Retail sales in St. Petersburg have recovered slightly better than elsewhere in the Northwest Federal District. Overall, the retail sales slump in St. Petersburg was notably smaller than elsewhere, with the city's retail sales in the first half of this year reaching the pre-recession level. St. Petersburg's share of retail sales in the Northwest Federal District has gradually risen to more than 45 %. Trends in retail sales in the Moscow mega concentration and St. Petersburg partly reflect their continuously growing populations. Populations of both have been increasing by about 1 % a year during this decade.

Real developments of retail sales in Russian federal districts and major urban centres, 2015−18

Source: Rosstat.