Not the Model for Assembly
Driven down by five-month decline, the composite anticipatory index of Development Center sank below 0.4 percent in annual terms in October, signaling the economic growth is likely to slow down in Russia. Industry that suffers from low efficiency of enterprises is one of the flaws of economy, the analysts forecast.
Overall, Russia's industry showed just 15.4-percent efficiency by seven-month result, Russian Statistics Service said. Last year’s indicator stood at 14.4 percent, so the growth was minimal despite skyrocketing prices for raw and some slowdown in rates of natural monopolies. “Once again, it points to evident problems with efficiency growth in industrial production,” analysts of Development Center specified in the report.
The processing industry (less refining and metallurgy) had 6.1 percent efficiency vs. 5.4 past year. But the growth wasn’t fueled by raw prices.
This way or another, efficiency of Russia's industry is dragging behind Europe, not to speak of China. This low efficiency creates situation of financial hunger in industry despite all money flowing to the country. The enterprises don’t have enough funds of their own and the loans are too expensive to raise. As a result, quite a few sectors of industry have been cut off the loan securing. The exception is foreign car assembly, which benefits from access to foreign funding.
But expansion of assembling business is sustained by the growth in populace income, while efficiency of producing cars in Russia is just 3.9 percent. So, even if makers of foreign cars are interested in conquering our market now, they may shift to China, where the efficiency of assembly production reaches 30 percent, said the report of Institute of Complex Strategic Research.
www.kommersant.com
All the Article in Russian as of Nov. 17, 2006
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