Russian businesses’ spirits sinking again – MNI Indicators

By Andrei Skvarsky.

Russian companies’ roller coaster-like sentiment about the general business environment in their country edged down again in October after bouncing back somewhat in September and August, according to surveys by MNI Indicators, part of the Deutsche Boerse group.

Overall, Russian companies with relatively gloomy feelings outnumbered the more upbeat part of Russia’s business community in October, according to the latest of monthly surveys by MNI Indicators.

The reverse had been the case for five months before, the polls suggest.

In each of its surveys, which it launched in March 2013, the London-based intelligence firm questions executives at about 200 big Russian companies which represent the manufacturing, service, construction and agricultural sectors and are listed on Moscow Exchange.

Respondents in October’s poll complained that loans were harder to obtain in October although they said their companies did manage to keep their finances in the black, MNI Indicators said in a statement.

However, the depreciation of the ruble had pushed up costs for companies and hence forced them to raise the prices of their own goods and services, the intelligence firm said.

The weak ruble did help to put up exports a little in October but the overall number of orders received by the companies represented by the respondents contracted again. This was a sign that domestic demand remained subdued, MNI Indicators said.

At the same time, respondents were more optimistic about the next three months because of an approaching Russian holiday period. Their companies were preparing for it by building inventories and clearing backlogs, the statement said.

Said MNI Indicators chief economist Philip Uglow: “With business sentiment paring back sharply into negative territory, suggestions that the Russian economy has stabilised may prove premature. The central bank now finds itself between a rock and a hard place, with the general malaise in the business environment at odds with the renewed upward pressure on prices and a precarious currency.”

MNI Indicators conducts its surveys via computer-aided telephone interviews.

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