Business confidence in Russian extractive industry down in Dec - Rosstat
MOSCOW. Nov 23 (Interfax) - The business confidence index for the Russian extractive sector fell to negative (-) 5% in December, from -2% in November, zero in October, plus (+) 4% in September, +5% in August, +8% in July and +9% in June, the Federal State Statistics Service (Rosstat) said.
In the manufacturing sector, the index was negative 5% in December, -3% in November, -1% in October, +1% in September and August and +2% in July.
In the electricity, gas and water production and distribution sector the index fell to +6% in December, from +8% in November, +9% in October, +7% in September, +3% in August, minus (-) 2% in July and -10% in June.
The 4,600 or so respondents surveyed expect output to increase: the gap between the respondents expecting output to increase in the next three months compared with those expecting output to decline was 1 percentage point in the extractive sector and 12 pp in manufacturing.
Rosstat said 10% of respondents thought the economic situation at their companies was good and 78% satisfactory in the extractive sector, and 8% and 79%, respectively, in manufacturing. Around 22% and 25% of respondents from the respective sectors said they expected the economic situation to improve in the next six months.
Respondents reported average capacity utilization at 65% in July, and more than 80% of respondents thought capacity would be sufficient to meet demand over the coming six months.
Among factors constraining production growth, respondents mentioned a high level of taxation, insufficient demand for production on the domestic market uncertainty in the economic situation and a lack of funds.
The business confidence index is a qualitative indicator based on management reports concerning forecast output, inventories and demand in three basic industries - subsurface resource extraction, processing and electricity, gas and water production and distribution - that anticipates shifts in economic variables. Small business is excluded from the calculation. The indicator is the arithmetical "balance" of the responses to the survey questions concerning expected output and actual demand less current inventories of finished product. The balance of expected output indicates the variation among producers noting an increase or decrease in output. The balance of actual demand less current inventories indicates the variation among producers noting a level above or below normal.
