OREANDA-NEWS. May 21, 2010. Rosstat released industrial output data revealing 10.4% YoY growth in April, bringing the 4M10 figure to 8.3%YoY, reported the press-centre of OTKRITIE Financial Corporation.

View: We treat the data positively, as the April results outpaced both our expectations (7.8%) and consensus forecasts (7.2%). The figures also underscore a substantial improvement in manufacturing industries, which grew 15.7% YoY in April compared with just 5.1% in March. While last year’s weak base clearly contributed to the strength of growth, we still believe that the April results reflect an improvement over previous months.

State support for the automotive industry, via the ‘cash for clunkers’ program and interest rate subsidies for car loans, was one of major factors underpinning the strong performance of the manufacturing sector. In addition, the construction materials segment is also demonstrating improvement over previous months. Thus far, construction itself has yet to rebound, down 8.1% YoY in 3M10. Nevertheless, we believe industrial data hints at upcoming improvements in the construction sector, which is crucial for the capital investment process. With that, we are will likely see some future improvement compared to a very weak 1Q10, and reiterate a 3.1% full year GDP growth forecast.