Decreased demand for building materials and electronics observed in Kuban region
The Krasnodar region has recently seen a dip in consumer interest in construction materials, home appliances, and electronics, as per RBC's findings. Let's break down the factors contributing to this reduction.
First and foremost, the end of subsidized mortgage programs and the surge in interest rates are to blame. These financial circumstances have dampened the housing market, causing a ripple effect that includes the demand for building materials, home appliances, and electronics.
In addition, the increased recycling fee has cooled down the car market. Despite this setback, demand in the dining sector remains robust, driven by a surge in interest in domestic tourism.
The Bank of Russia foresees inflation easing to 4% next year, promising a balance between supply and demand. To maintain this equilibrium, strict monetary policies will be upheld to curtail demand and restrict price growth.
Historically, regional programs have been instrumental in modernizing factories in Armavir and Timashevsk. These initiatives have secured low-interest loans from the expert council of the Krasnodar Industrial Development Fund.
Now, let's consider some broader aspects that might have contributed to this trend:
- Pressure on Real-term Retail Sales: While overall Russian retail turnover experienced growth in 2023 (13.5% to RUB 44.5T), a decline in real demand of 6.7% occurred due to inflation, primarily in essential goods. Reduced purchasing power may have impacted non-essential items like appliances and electronics.
- Currency Devaluation: The weakening ruble (expected to be worth around $460-470bn in 2024 forecasts, down from $491bn in 2023 total turnovers) could have boosted import costs for electronics and appliances, raising consumer prices.
- Financial Restrictions: The country-wide pattern of subsidized mortgages aiding housing demand is applicable here, as their expiry reduces construction activity and associated material/appliance purchases. Additionally, sanctions-induced capital restrictions may have constricted the availability of credit for consumer durables.
- Regional Factors: Krasnodar's geographical proximity to conflict zones could potentially worsen inflationary pressures and shadow supply-chain disruptions for local markets. However, this link remains speculative with the currently available data.
- The end of subsidized mortgage loans in Krasnodar has contributed to a decrease in demand for construction materials, home appliances, and electronics, as the surge in interest rates has dampened the housing market.
- An increased recycling fee has cooled down the car market in Krasnodar, but demand in the dining sector remains robust due to a surge in interest in domestic tourism.
- To maintain a balance between supply and demand, the Bank of Russia foresees inflation easing to 4% next year and will uphold strict monetary policies to curtail demand and restrict price growth.
- In whatsapp groups or finance discussions, businesses might be discussing how regional factors can affect the trend of slumping demand in Krasnodar, such as the potential impact of pressure on real-term retail sales, currency devaluation, financial restrictions, and the geographical proximity to conflict zones.
