Industrial production grew by 8.5% yoy in January-August, 2017 and by 0.3% mom (-1.4% mom sa), taking into account the seasonal adjustment, on a monthly basis, there has been a fall in industrial production since May.
Short-term economic indicator (>60% of GDP) in January-August 2017 came at 5.8% yoy. The corresponding figures in the first half of 2016, was in the negative zone -0.5% yoy. Average price of Brent oil for 8 months of this year was $51.7 per barrel, against $41.6 per barrel in the same period of 2016, the average oil price in August 2017 rose to $51.5 per barrel from $49 per barrel in July.
Industrial production grew by 8.5% yoy in January-August, 2017 and by 0.3% mom (-1.4% mom sa), taking into account the seasonal adjustment, on a monthly basis, there has been a fall in industrial production since May. Growth in the mining industry in January-August, 2017 amounted to 11.3% yoy. Relative to July, there was a drop of 4.2%. Manufacturing rose by 6.1% yoy (January-August 2017), an increase by 12.3% compared to the previous month compensated for a drop at 13.5% mom in July. In electricity supply, etc. there was an increase by 5.2% yoy (January-August 2017), but a decrease was observed against July at 7.7%.
In the mining industry in August coal mining (-1.1% mom) and oil (-6.6% mom) dropped. Mining of iron ores (+ 2.4% mom), non-ferrous metals (+3.7% mom) increased. It should be noted, that oil production has shown a peak at 6.24 million tons in March and in the following months, its growth remains below this mark.
In the manufacturing sector, the growth was observed in the food production (+4.9% mom), in the chemical industry (+2.6% mom), in metallurgy (+0.5% mom), in the production of finished metal products (+18.3% mom), in engineering (+29.4% mom). In refining there was a decrease of 11.5% mom due to planned repairs at the two refineries.
The amount of gross output of agriculture in January-August, 2017 amounted to 1.9% yoy, in the corresponding period of the previous year the indicator increased by 6.7% yoy in view of high harvest. In the current year, according to the forecasts by the Ministry of agriculture, grain production will be at 19.5 million. t. that is less than 23 million. t. in bunker weight in 2016.
In January-August, 2017 there has been a sharp slowdown to 0.1% yoy in construction, as there has been a decline of 6.2% on a monthly basis. Approximately 40% of the construction works were due to the highway and civil engineering structures. Thus, the completion of preparations for EXPO 2017, in the absence of other major buildings had a negative impact on the volumes of construction.
Investments in January-August 2017 amounted to 3.4% yoy, with decrease of 2.1% from July reading. Investment in education rose by 25.4%, transport to 5.9% in industrial output, at 5.1% yoy. Investment in housing fell by 0.2% yoy in January-August of 2017.
The goods turnover rose by 8.1% yoy in January-August of 2017, the overall index showed a growth of 4.7% yoy. Turnover in railway transport increased by 12% yoy, via pipeline by 11% yoy, in air transport at 30% yoy. In road transport there was a zero growth, which, by the way, contrasts with a rise of 6% in retail trade.
In telecommunications, an increase was noted by 2.9% yoy in January-August of 2017, after the downturn in the previous 2 years.
Retail sales showed a growth of 6.3% yoy in January-August of 2017, while wholesale trade grew at 1.3% yoy.
Indicators of sectors of economy weaken since the second quarter of this year, which can be associated with the achievement of peak oil production in March. Another important factor is that the average cost of oil still stands at $50 a barrel since the end of the year 2014. In industrial output in 4 of 8 months a decline on monthly basis was observed, as well as in investments, in half of the eight months. In construction, the growth has slowed to zero, and by the end of the year, there probably will be the fall due to a high base last year when construction of Expo objects and capacity expansion in the mining industry had taken place. In view of a more moderate harvest in agriculture, economic growth in the current moment largely depend on extractive industries. Real wages in August remain in the negative zone, but, in general, there is a fall for the third year. As a result, there is a high probability that the retail trade turnover ultimately will come in accord with the level of wages at the end of the current year at around 2% as in 2016.