Industrial production climbed for an eighth month in June, the State Statistics Service said Thursday, signaling that manufacturing output may continue outpacing gains in consumer spending and employment.
Production at factories, mines and utilities rose an annual 9.7 percent after a 12.6 percent increase in May, the service said. Nonseasonally adjusted output fell 0.4 percent from the previous month.
Manufacturers and commodity producers have led the economy out of its steepest contraction on record. Companies including AvtoVAZ are spearheading the rebound. The automaker posted net income of 1 billion rubles ($32.7 million) in the second quarter after losing about 40 billion rubles last year as sales plunged.
Manufacturing growth jumped in June to the highest level in more than two years, according to VTB Capital. The government may raise its 4 percent forecast for economic growth this year as the outlook continues to improve, Economic Minister Elvira Nabiullina said Thursday.
“The main positive growth drivers appear to be related to a direct impact of the government’s efforts to reinvigorate the economy,” Renaissance Capital economists led by Alexei Moisseyev said in a report.
The recovery in output is continuing to outperform gains in consumer spending and employment. Growth in industrial production averaged more than 10 percent in the first five months, while retail sales averaged below 3 percent in the same period. Factories may face less pressure to boost production to rebuild inventories if domestic demand cools.
“Consumer spending is on the rise, but recovery of consumption does not look so stable,” analysts at TKB Capital said in a July 12 report.
Manufacturing rose an annual 14 percent in June, according to Thursday’s report. Electricity, gas and water output rose 2.3 percent, while mining and quarrying added 4.4 percent.
Industrial output shrank 10.8 percent in 2009 and capital investment fell 17 percent, the data show.