OREANDA-NEWS. June 21, 2010. Rosstat reported strong industrial figures, revealing 12.6% YoY growth for May and 10.3% YoY growth for 5M10. Rosstat has also finally published the data based on 2008 industrial structure (rather than 2002 it used before), and thus revised the 1Q10 industrial growth figure from 5.8% to 9.5%. Figures for 2008 (from 2.1% to 0.6%) and 2009 (from -10.8%, to -9.3%) were likewise adjusted. Additionally, the Economics Minister said that retail trade was up 5.1% YoY, while capital investment rose 5.5% in May, reported the press-centre of OTKRITIE Financial Corporation.     

View: The Rosstat data demonstrates that Russian industry is trending stronger than was assumed on the basis of the previous methodology for comparison. The revised figures indicate potential growth of 7-9% this year, which would almost offset the decline in 2009. Structurally good news was the improvement in construction materials production  as it also suggests stronger capital investment potential.

Growth in automobile production reflects the constructive impact of the ‘cash for clunkers’ program, providing solid justification for government decision to extend it. Both the 5.1% growth in retail trade and the 5.5% increase in capital investments are mainly a reflection of a weaker base, rather than evidence of significant improvement over previous months trend. However, if the positive industrial trend is not supported with acceleration in consumption or investment the stronger growth would be hampered.