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• Business Barometer 2011 for North-West Russia

Business Barometer 2011 for North-West Russia

With regard to the development of the general economic outlook for 2011, the expectations of Russian business executives are more optimistic than those of the previous year. The balance figure reflecting this outlook rose by 14 units for a positive figure (+42). The differences in the expectations among the various business sectors are minimal, although the balance figure rose most significantly in industry. Geographically, expectations regarding improvements in the general economic outlook are most positive in St. Petersburg.

Turnover figures are expected to increase in 2011, with turnover growth expectations more positive in St. Petersburg than in other areas of North-West Russia or Moscow. However, in comparison to the previous year, a marked increase in these expectations was recorded in the other areas of North-West Russia.

The business executives expect to see a moderate increase in both investments and the labour force during 2011. Growth expectations for investments are most optimistic in the commercial sector and in the other areas of North-West Russia.

The expectations of the Russian business executives concerning the enhancement of their personal financial positions in 2011 are more optimistic than earlier - the balance figure reflecting these expectations increased by 19 units for a positive figure (+38). Furthermore, business executives in Moscow and St Petersburg are most bullish about seeing an improvement in their personal financial standings in 2011.

The business executives expect the Russian economy in general to see a slight improvement in 2011. Expectations are higher in the commercial sector and industry than in the service sector. Furthermore, these expectations are greater in St. Petersburg than in other areas of North-West Russia or Moscow. The balance figure rose most significantly in St. Petersburg, and in industry.

Despite an increase of 48 units in the balance figure reflecting the actual development in the general economic outlook during 2010, the overall figure remained in negative territory. The differences between the regions and different sectors were negligible.

The balance figures indicating the growth in turnover and labour force size, as well as the financial standing of Russian business executives and the Russian economy in general, remained negative despite showing an improvement from the previous year’s figures. Following the economic crisis in Russia, the balance figure reflecting the growth in turnover was positive (+1) in the commercial sector, but remained negative in industry (-2) and the service sector (-7). The most significant rise in the balance figures was recorded in the industrial sector (59 units). The balance figure reflecting growth in investments returned to positive territory, rising by 24 units from last year.

The majority of Russian business executives interviewed (70%) considered the actions of President Medvedev’s administration to have had no impact on the development of business op­erations or the operating environment over the past 12 months. Despite this, the balance figure reflecting the actions of the President’s administration showed a slight improvement to record a positive figure (+ 7).

As for the impact of the actions of Medvedev’s administration on investment opportuni­ties for foreign businesses in Russia during the past 12 months, the balance figure reflecting the views of all the respondents increased by 10 units from the previous year. Every third (34%) Russian business executive felt that the actions of Medvedev’s administration have had no positive impact on investment opportuni­ties for foreign businesses in Russia during the past 12 months. By comparison, 23% of respondents believed that these actions have improved such investment opportunities while 4% believed that they have had a weakening effect.

Opinion was clearly divided when it came to the question of the availability of the skilled labour required by companies over the next 12 months. Every third Russian business executive interviewed estimated that the availability of skilled labour would be notably or somewhat higher over the next 12 months. A similar number of business executives felt that there would be no change from the present situation whereas every fourth business executive believed that the availability of skilled labour would weaken.

Finally, Russian business executives believe that the price of the energy required for their businesses would rise during the next five years (for the period of 2011-2015).

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