The regional structure of the Russian economy is characterized by impressive stability. The major change over the past 10 years has been the shift of several regions (Krasnoyarsk Krai, Kamchatka Krai, and Arkhangelsk Oblast) from being geared to raw materials to better understanding of the importance of manufacturing. The end of a recession is ensured by extractive industries and energy supplies, which grew in almost all types of regions in 2016. The manufacturing industry is growing mainly in more diversified regions. In 2015-2016, 20 regions of Russia, mainly financial and economic centers, that of the Urals, Volga, and Siberia, accounted for 67 % of industrial shipments. Besides, the industrial industry output of 15 of these regions increased quite significantly in 2016. In the new bulletin on the current trends in the Russian economy, the Analytical Center experts presented their analysis of the regional trends of industrial production.
In 2016, the extractive sector grew by 2.7 % on a year-on-year basis, the processing sector grew by 0.5 %, while the electricity, gas, steam and air conditioning supply sector grew by 1.7 %, the bulletin says. In general, industrial production increased by 1.3 %, being now at the same level it was in 2014 (in 2015, it fell by 0.8 % on a year-on-year basis).
The 20 largest industrial regions of Russia account for 2/3 of the national industrial output (67.1 % in 2016, according to OKVED), including 70.4 % of the extractive sector output and 66.9 % of the processing industry output, experts say.
The share of employment in industry in Russia (27.2 % including that of the construction sector) is comparable to that of developed countries. Among the G7 countries, Russia is second only to Germany (27.7 %) and to China (29.3 %) among the BRICS countries.
The authors of the bulletin point out that in 2016 industrial production grew in 65 regions of Russia. The following types of regions had high growth rates in 2016: financial and economic centers (5.4 %), Moscow and Moscow Oblast in particular, regions with a diversified economy (+ 4.7 %) and agrarian and industrial regions (+ 4.0 %).
According to the Federal Statistics Service, in the first half of 2017 industrial production grew by 2 % — the growth rate of the industrial output which the Ministry of Economic Development forecasts for the end of 2017. Extractive and manufacturing industries increased by 3.1 % and 1.2 % respectively. In the first five months of 2017, industrial output has grown in 69 regions of Russia, accelerating in most types of regions, especially in developed regions that focus on manufacturing.
For more information, see the "Industrial Production Trends: Regional Inequality" bulletin.
For other issues of our bulletin on current trends in the Russian economy see Publications.