The first results of the October business climate assessments in the industry of the Gaidar Institute record a rebound in optimism in the sector to the level of August after the failure in September 2021. The main source of optimism growth is record low stocks of finished goods, while demand forecasts remain at the September level. Meanwhile, industrial inflation appears to have stabilized.
The index of industrial optimism of the Gaidar Institute (IEP), according to data collected on October 8-19, compensated for the September decline and returned to the indicators of August 2021. Recall that most of the leading business climate indicators in the sector deteriorated in September, and only PMI Markit indicated signs of a slight increase in demand and production in manufacturing after a decline in July-August (see Kommersant on September 30).
Although production plans, estimates and actual dynamics of demand improved, the main contribution to the October rise in the index was made by estimates of finished goods stocks.
The balance of this indicator, as a result of an increase in the share of answers “below normal” and a decrease in the share of answers “above normal”, exceeded the local minimum of December 2020 and showed a record shortage of finished goods in industry for the 21st century.
“A greater deficit was registered only in 1999-2000, when enterprises for a long time (for a very long time – until March 2001) could not believe in the end of the protracted crisis of the 90s,” notes the author of the study, Sergei Tsukhlo.
However, as noted by Mr. Tsukhlo, output growth at the end of the year will not be confident, as forecasts for demand for the same period did not show a recovery similar to the output plans (see chart). “And the fight against the virus, as the latest data on the incidence rate and the newly introduced restrictions show, is far from complete and even from positive dynamics,” he notes.
At the same time, forecasts of changes in employment continue to confidently gain optimism – the industry, in the second quarter “living in conditions of the most severe staff shortage, is ready to continue to recruit staff and raise salaries,” the study says.
At the beginning of the fourth quarter of 2021, capacity and personnel deficits reached historic highs.
Against the background of expectations of growth in employment and wages, the IEP polls also indicate that inflationary expectations of enterprises have stabilized at the September level, which coincides with the expectations of the Central Bank. In the October bulletin of the Bank of Russia “What the Trends Talk About”, analysts noted: “The annual growth in consumer goods producer prices has probably passed a local peak and will slow down in the coming months. However, given the continued influence of pro-inflationary factors on the supply side, the scale of the expected slowdown may turn out to be moderate. ”
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