IP technical drivers became drags in November. The warmer weather this November is mainly to blame for the 3.1% YoY decline in electricity consumption and growth of a mere 0.7% YoY (vs. 16% YoY in a month ago) in gas output (despite the 17% YoY increase in gas exports). Mining, though, seems to have been supported by a milder drop in coal output and slightly faster oil production. Manufacturing is unlikely to have returned to the black last month, as weather-adjusted electricity consumption growth worsened significantly (might be partly explained by the difference in working days) and rail cargo volumes continued shrinking, admittedly at a slower pace. On balance, we expect a slightly deeper IP drop owing to the weather and calendar factors, while the underlying trend is still that of stagnation.
Are private consumers in Christmas mood? According to AvtoVAZ, its domestic car sales are still in a double-digit contraction (even correcting from the sharp decline in October). Also, employment across both the manufacturing and services sectors declined at a faster pace, according to the PMI surveys. In the meantime, the fact that the new business sub-index in the service sector edged up to a seven-month high was an encouraging news, although we do not think it flags a reversal in the underlying trend which points to a further slowdown.