Rebound in Industrial Output: A Mixed Bag of Opinions
Attempting a comeback
In an intriguing turn of events, analysts are scratching their heads over the unexpected surge in industrial output figures in April 2025. According to Rosstat data, the growth rates shot up to 1.5% year-on-year from 0.8% in March. A revival in monthly dynamics, excluding seasonal and calendar factors, pushed this figure to 0.9% from -0.7% respectively. However, they're yet to agree on the root cause of this anomaly.
In the first quarter, the CMASF economists hinted at a technical recession in the civilian industry, but some disagreed, attributing the effect to an unusually high base at the end of 2024 due to accounting peculiarities. But in April, the "stagnant positive" was largely credited to the rise in oil and gas production and processing, according to their assessment. Analysts estimated a 1.2% increase in hydrocarbon production in April, contrasting the average decline of 0.3% per month in the first quarter of 2025. The growth was led by an increase in oil production, with gas production remaining stagnant, falling 0.4% in April. The rise in oil refining volumes (up 2.2% in April) seemed to be driven primarily by an increase in exports.
However, the non-energy sectors of the processing industry have been experiencing a steady decline since the beginning of the year, with an average of 0.7% per month in January-April. Output in these sectors decreased by 1.6% annually.
It's worth noting that in April, as in March 2025, there was an additional working day compared to the previous year, and without the positive influence of the calendar, the industrial production index would have been a mere 101%, and in civilian processing sectors, it would have been 97.4%.
The latest data shows a halt in the decline in food product manufacturing, a decrease in the production of pharmaceuticals, rubber, and plastic products, signs of a slowdown in the decline of construction materials production, a resumption of growth in computer, electronic, and optical product manufacturing, an increase in automobile production, and a decline in machinery and equipment manufacturing.
Rosstat Records a Slight Recovery in Industrial Output in April 2025
Analysts at Raiffeisenbank estimate that industrial growth (at 0.5% in April compared to March, seasonally adjusted) is driven by the machinery sector, contributing a 0.7 percentage point increase in the overall index. This suggests that the cooling off of economic activity in a broad range of sectors (84% of all industry) may still be underway, concludes the bank's experts.
On the other hand, economists from the Telegram channel "Solid Numbers" report a 0.3% growth in industrial production in April compared to March, seasonally adjusted: 0.9% in extraction and no change in processing. In processing, the leaders were computers, electronics, and optics (up 5.3% in April), tobacco (up 3.4%), and other machinery and equipment (up 2%), while the laggards were leather products (down 10.9%), printing (down 8.7%), other transport equipment (down 7.9%), and finished metal products (down 5.8%).
The discrepancies in the analysis of industrial output growth for April 2025 stem from differences in the context and geographic focus of the analyses. Global analyses, such as the U.S. industrial production data, indicate a stagnant industrial output for April 2025, with a decline in manufacturing output led by the automotive sector. Analyses focusing on India, however, report a slower industrial output growth to 2.7%, with a different sectoral composition.
In summary, the discrepancy in the analysis arises from differences in geographical focus and sectoral performance, with the U.S. experiencing stagnation and India reporting a slowdown in industrial output growth. Manufacturing remains a key sector in both contexts, albeit with varying degrees of growth.
In the financial analysis of industrial output growth, a significant contributor to the 0.5% increase in April 2025, as reported by Raiffeisenbank, is the machinery sector, highlighting a potential recovery in the oil-and-gas industry due to its close ties with the sector. On the other hand, the Solid Numbers economists report a 0.3% growth in industrial production, with computer, electronic, and optical product manufacturing leading the growth in the energy sector, while the manufacturing industry as a whole shows mixed results across different regions.
