By Andrei Skvarsky.
Deutsche Boerse-owned intelligence and research firm MNI Indicators argues, citing a survey made last month, that overall sentiment among large Russian companies corroborates its assertion this spring that the Russian economy is past its lowest point.
“Against all expectations, the Russian economy continues to exhibit resilience and appears set to head down the long, twisting road to recovery,” an MNI Indicators statement quoted the firm’s chief economist, Philip Uglow, as saying.
The statement said that inflationary pressures had been easing, that order books had been growing, and that credit had become more accessible.
The MNI Russia Business Sentiment Indicator, an index based on monthly polls among executives at about 200 Russian companies representing the manufacturing, construction and service industries and agriculture and listed on Moscow Exchange, in June reached its highest mark since July 2014, with optimists outnumbering pessimists, albeit marginally, for the second consecutive month.
Construction companies were the sole driver of June’s upward movement, while sentiment among firms in the manufacturing and service sectors was unchanged on the month, the statement said.
Companies were considerably more optimistic in their near-term outlook, with the Future Expectations Indicator, part of the MNI Russia Business Sentiment Indicator, rising to a 22-month high.
June’s survey was the first since July 2014 in which respondents reported an increase in their export orders. This helped to lift the New Orders part of the general indicator to an eight-month high.
Inflationary pressures continued to ease in June, with input prices sinking to the lowest point reported for this year. At the same time, a record number of companies anticipated that they would raise the prices of their own goods and services over the coming three months after having kept them in check for the past year.
Rate cuts by the central bank served to make credit more available, MNI Indicators said. The latest cut was carried out after the poll was finished.
“In addition to the improvement in business sentiment, a growing number of indicators are rapidly regaining the ground lost over the past year in a sign that the worst may have passed,” the statement quoted Uglow as saying.
However, “while the latest rate cut by the central bank could help strengthen business sentiment further, the extension of economic sanctions by the EU threatens to act as a dampener on the recent resurgence in confidence,” the chief economist said.