Russian business sentiment recovered slightly in April after declining sharply in March to the lowest level in three months, although Export Orders fell to their lowest since the series began in March 2013.
The MNI Russia Business Indicator rose to 55.6 in April from 52.5 in March, although was well below the 62.9 outturn seen in April 2013.
The crisis in Ukraine had a detrimental impact on the Business Indicator in March, and while it has not made up all of its lost ground, the April increase represents a stabilisation.
Still exporters felt the brunt of the pain with the Export Orders Indicator falling to a record low of 44.4 from 48.3. Weakness in exports comes in spite of the fact that sanctions against Russia have been limited to specific people. It is likely that some foreign companies have anyway pulled orders in light of the Ukraine situation.
The Inventories Indicator declined significantly in April to 32.2 from 40.4 in the previous month. The continued slowdown in stocks of finished items is probably due to the uncertainty regarding further sanctions on Russian businesses with companies meeting demand requirements by running down stocks.
Commenting on the latest survey, Philip Uglow, Chief Economist of MNI Indicators said, “Sentiment improved a little in April following the initial hit to business confidence from the fallout in Ukraine last month. Still, the detail of the survey shows exports at the weakest since the series began a year ago.”
“Growth contracted in the first quarter, raising the spectre that Russia will fall into recession in the second quarter. With little sign of tensions easing in Ukraine, Russia risks being frozen out with little or no economic growth this year.”
MNI Russia Business Report - April 2014
