BOFIT Viikkokatsaus / BOFIT Weekly Review 2019/17
According to Russian Statistics Service, the volume of industrial output rose by 2.1 % y-o-y in the first quarter of 2019.
The output volume for mineral extractive industries was up 4.7 % y-o-y. This reflects to some extent changes in the production ceiling agreement reached among a group of oil-producing countries. Last June, Russia and other countries interpreted earlier agreements in such a way that they could increase oil output. As a result, Russia’s oil production grew by 4 % from June to October. In December, a new agreement was reached and Russia committed to cutting back on production by about 2 % (BOFIT Weekly 50/2018). The cuts are to be made during the first half of this year. Russian oil output declined by 1 % from December to March.
Manufacturing production volumes grew by 1.3 % y-o-y in the first quarter. Production of foodstuffs, beverages and paper were among the fastest growing branches. The clothing and textile industries were among the weakest performers.
Construction activity rose by 0.2 % y-o-y in the first quarter. However, there are still grave concerns about the reliability of these numbers. The revised numbers released at the start of the year lifted the construction activity sharply to show a 5.3 % y-o-y increase in 2018. At least part of the revision seemed to be due to late recording of oil and gas projects in northern Russia. Given that the most intensive phase of construction on the Arctic coast is ending, construction activity can be expected to cool in the year ahead.