Tatarstan improves industrial production indicators
Over 10 months, Tatarstan shipped industrial goods, performed works and provided services worth 4.5 trillion rubles, of which 1.1 trillion were in the mining sector
Tatarstan's industry began the autumn business season with growth. In September, production in the republic grew by 12.7% compared to the same period last year and by 14% in October. Over 10 months of 2024, growth was 3.9%. This is still lower than the Russian average of 4.4%, but it is already significantly better than the spring and summer figures, when Tatarstan was repeatedly mentioned in connection with the lowest industrial growth rates in the Volga Federal District. Read about what influenced the dynamics of industrial production, which industries make a significant contribution to growth, and how the situation in industry will develop further in a review of the analytical staff of Realnoe Vremya.
Turnover in industry reached 4.5 trillion rubles
The industrial production index, after repeated criticism of the relevant ministry, unexpectedly began to grow rapidly: in September 2024, compared to the same month last year, industry grew by 12.7%, in October 2024 — by 14%. In general, over 10 months of 2024, the industrial production index reached 103.9%. At the same time, in the field of mining, there is still a decline (index — 96.5%), and in the field of manufacturing — growth (108.2%). For January — September, the industrial production index in Tatarstan was 102.8%.
Over 10 months, Tatarstan shipped industrial goods, performed works and provided services for 4.5 trillion rubles, of which 1.1 trillion were in the mining sector and 3.2 trillion were in manufacturing. The largest contribution among manufacturing industries was made by: coke and oil products production (996.8 billion rubles), chemical products production (436 billion), motor vehicles, trailers and semi-trailers production (406.4 billion rubles), food production (277 billion rubles), rubber and plastic products production (199.5 billion rubles) and metal products production (137 billion rubles).
If we analyse the growth dynamics, the highest growth was recorded in the production of other vehicles (+182%), machinery and equipment not included in other groups (+24%), and the production of other finished products (+12.9%).
There was also growth in the production of medicines (+11.6%), paper (+7.4%), rubber and plastic products (+6.5%), metallurgical production (+6%), food production (+5.9%), computer production (+5.4%), and coke and petroleum products (+5%).
In 2024, Tatarstan saw a decline in clothing production (-16.4%), textile production (-13%), wood processing and wood product production (-7.1%), mining (-3.5%), and finished metal product production (-3.3%).
Criticism was heard
At the all-Russian level, moderate industrial growth was also observed during this period, especially in the manufacturing industries — mechanical engineering and chemical production. For example, in October, the industrial production index in the country was 103.3%, which is comparable to the indicators of Tatarstan. However, in other regions, the growth rate was less pronounced due to problems in the extractive sector.
“A constant increase in the key rate may slow down industrial development. More expensive loans and limited availability of financing will negatively affect investments in new projects, especially in sectors with a high debt burden and low profitability. Although Tatarstan's manufacturing sector is likely to continue to grow, its pace may slow down in 2025 if rates remain high and export demand slows,” Kabakov predicts.
Industry is growing, but business profitability is declining
“Industrial production for 10 months of 2024 in Russia in relation to compared to last year increased by 4.4%, in the first quarter of this year the industrial production index was — 5.6%, in the first half of the year — 4.4%, these circumstances indicate a decrease in the pace of industrial development. The main reasons are the high key rate and personnel shortage,” comments economist and head of R-Invest company Rustem Shayakhmetov.
The main growth of industry is due to defence-related orders, while the extractive industries are declining, he emphasises.
The expert also drew attention to the fact that in October in Tatarstan the number of liquidated enterprises was almost 1.5 times higher than those created, which, in his opinion, indicates financial problems of business and a drop in profitability. The financial results of the activities of organizations in the republic in January-September 2024 also indicate a decrease in business profitability: the balance of profit and loss amounted to 580 billion rubles, or 58.8% of the previous year's level. This is also reflected in the volume of investment: if in Russia in January-September of this year the volume of investment increased by 8.6%, then in Tatarstan — by 2.1%,” the economist noted.
Even with increased sanctions pressure, Russian industry will grow due to a large component of defence orders and related production, he predicts. The growth of the key rate does not have such a strong impact on the defence industry, since everything there is built on direct budget financing, and most industries do not attract credit resources.
In other sectors of industry, the lack of available credit resources will restrain development. Although there are a number of industries that are trying to neutralize the impact of the high key rate through preferential lending, the budget is not unlimited. Therefore, the pace of industrial development in the medium term, according to Rustem Shayakhmetov's forecasts, will slow down.