In January-July 2020, the mechanical engineering industry was in decline, with total production in the five mechanical engineering sub-sectors in July being 2.8% below the July 2019 result, according to the latest issue of AK&M Information Agency's monthly paper "RUSSIAN INDUSTRIES: PRODUCTION, FINANCE, SECURITIES. Mechanical Engineering" (No. 1390) issued on September 16, 2020.
According to preliminary data, August undermined the recovery trend observed in May-July as the decline deepened in two of the five machine-building sub-sectors, especially in the automobile industry (-14.3% m/m). However, the slump the Russian manufacturing industries saw in August looks rather like a correction following a fairly rapid rebound in the previous three months, and the pent-up demand effect manifesting itself as the quarantine restrictions were lifted is now fading away, according to a relevant review by Russia's Ministry of Economic Development.
The production and demand indices for industrial products in Russia calculated by the Institute for Natural Monopolies Research (IPEM) stayed low in August indicating that the July gap between them resulting from their dynamics in that month was a short-term event as the production and demand for industrial products declined at a comparable pace again in August. In particular, the demand index in the engineering industries fell notably in August 2020 (-19.0% against August 2019, -19.1% year-on-year in January-August 2020). Shipments of mechanical engineering products for delivery by rail in August 2020 decreased by 5.8% year-on-year (-9.6% YoY for the 8-month period); shipments to domestic dropped by 1.3% in August 2020, by 8.1% for the 8-month period), exports fell by 31.2% and 20.7% respectively.
Sales of new motor vehicles in Russia decreased by 9.1% in August. According to market research company ASM Holding, 983,787 motor vehicles were sold in Russia for the 8-month period, which is 12.2% below the result achieved in January-August 2019. According to the Association of European Businesses (AEB), sales of passenger cars and light commercial vehicles (LCVs) in Russia decreased by 0.5% year-on-year to 137,517 in August. The 8-month result of the Russian car market reached 880,198 (-16.9%).
In value terms, the exports of machines and equipment, cars and trucks for the first 7 months of 2020 amounted to $12.356 billion, while imports of machine-building products were 8 times higher ($98.845 billion). Compared with the previous year, exports declined across the whole range of products in January-July, but in July alone, physical exports of motor transport vehicles surged against June. Exports of agricultural machines and equipment for January-July 2020 increased by 23% year-on-year to RUB 8.6 billion.
An in-depth review is provided in issue 1390 of AK&M Information Agency's "RUSSIAN INDUSTRIES: PRODUCTION, FINANCE, SECURITIES. Mechanical Engineering" monthly paper issued on September 16, 2020.
