OREANDA-NEWS. January 26, 2010. Russian industrial output was up 2.7% YoY in December, which brought the figure for FY09 to -10.8%, according to Rosstat, reported the press-centre of OTKRITIE Financial Corporation.

View: While the December output figure was generally in line with consensus (+3.0% YoY) and the visible improvement (in comparison with previous months), this is more a reflection of a weaker base than an indication of any improvement.

Still, we think it could provide positive sentiment as it is the second consecutive month in which positive industrial growth figures were posted. Looking inside the numbers, industrial growth was largely supported by energy and heat production, a by-product of the untypically colder winter this year. Mineral extraction has also performed strongly.

Meanwhile, even though the manufacturing sector posted a positive figure, this is not a sign of improvement, particularly with investment goods lagging behind. Thais is why we believe that the December industrial figures are not indicative of beginning of growth. Indeed, they seem to be further confirmation of continued stagnation.