The Russian textile industry will grow by almost 5% annually until 2030 – not because of exports, but mainly due to growing domestic demand, according to a recent report from the Russian Academy of Sciences (RAS).
In a comment to WTiN.com, an official spokesman for academy president Alexander Sergeev predicts that the fastest growth in production will be between 2021 and 2025, with annual growth rates of between 6.3% and 8%. However, the growth will steady in the next five years, according to academy predictions – with average annual growth forecast of 3.8% for 2026-2030.
Sergeev adds: “The increase of production will be mainly due to the ongoing recovery of the Russian economy from the financial crisis and its consequences. This will stimulate the launch of new investment projects in the industry and the resumption of suspended ones.”
Compared to World Bank growth forecasts for the entire economy, the academy’s forecasts are optimistic. The bank is suggesting the Russian economy will grow by just 1.5% this year, 1.8% in 2019 and 1.75% in 2020. While this is not a recession, it is far from the projections of robust growth for the textile sector released by the academy.
But in its report, the RAS said many leading Russian textile producers have already confirmed their willingness to invest in further development of their local business, considering the local investment climate to be favourable.
Moreover, local demand will also include purchases by the government. And Russia’s minister of industry and trade, Denis Manturov, the official responsible for the development of the textile industry, has said that the expected average 5% annual growth of the industry until 2030 will be largely supported by orders from the state.
Speaking on 5 September, Manturov said these orders will continue to play an important role in the development of the Russian textile industry. He added that, between 2019 and 2020, the national government plans to place orders for textile products worth US$1bn. These purchases will include textile fabrics for military and other government uniforms.
According to the RAS report, the biggest growth in output is expected to happen in the southern and central regions of Russia, where the majority of Russian textile enterprises are already located. But production will also grow in the north-west and the far east, where textile production has not been a priority for local business and regional authorities in the past, according to Sergeev.
Professor Georgi Ostapkovich, of Russia’s National Research University Higher School of Economics, says that, against the background of Russia’s current economic condition, growth within the textile industry at a rate of 4% and above is possible only if labour productivity rises. This would involve plants being re-equipped and the government removing administrative barriers that impede business.
Last year, according to Russia’s Russian Federal State Statistics Service (Rosstat), Russian textile production grew 2%.
But the problem of low labour productivity in the textile sector is recognised by the government. This month Russia’s ministry of economic development announced plans in St Petersburg to significantly raise the efficiency in Russian textile enterprises by 2025. Its ambitious goal is to boost labour productivity in the Russian textile industry by 30% during the next seven years, through supporting the technical re-equipping of manufacturing enterprises, aiding the introduction of innovative technologies in production processes, and improving the quality of training in the industry.
