Carmakers, Retailers Change Course
The Center for Short-Term Macroeconomic Analysis and Forecasting has published a special report on the macroeconomic preconditions for the financial crisis in the Russian economy at the beginning of August. Rosstat issues structured information and analysis of the condition of individual sectors several months after the fact, but data from June and July make it possible to see the points of instability in the economy that may become local problems. The center paid particular attention to the structure of bank debt and its relationship to working capital and the dynamics of its growth.
Although the data are from before the crisis, the center describes the data as “supplemental channels for the transfer of instability” in tables. Those are the sectors that had problems withdrawal of credit that could easily lead to default and bankruptcy.
The study notes that risks of impending default and emergency sales of assets to supplement working capital are now being observed in construction and transport companies, in the oil sector and, to a lesser extent, metallurgy and wholesale trading. High levels of debt burden and the need to sharply change strategies because of the crisis are seen in retail trade, agriculture and real estate, and less so in public utilities, hearting and electricity. The highest rate of annual profit to bank debt was observed in the textile and sewing industries (5.3%) in July, as well as in lumber milling (6.7%), automaking and toolmaking (12.1%) and agriculture and retail trade (17.4%).
The high rates for heating and electricity (126.9%), metals (98.8%) and chemicals (82.7%) in July were due to high export prices. As oil and commodities prices have fallen, it is barely possible since September to hope for high stability in those sectors, as compared, for example, to construction, where the annual rate of profit to debt is 27.7 percent. Only oil and real estate have remained comparatively stable.
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All the Article in Russian as of Oct. 20, 2008
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