Machine engineering

2008 proved to be another successful year for engineering sector,
especially for export-oriented companies. The automotive sector
growth, partly driven by consumer boom looks set to slow down as
new cars’ purchases have barely grown in the summer months.
Access to credit, which enabled more than 60% of new cars
purchases, has become more limited while WTO entrance is posing
new threats for domestic players.

Overall, 24% y-o-y increase in machine engineering output in 8M08
has become possible mainly due to strong export demand. Export
revenues of railway machinery and locomotive producers surged by
65% in the reported period as a number of enterprises began fulfilling
their orders more actively. As a result, sector earnings have again
shown near record annual growth of 2.2x.

Sector, which contributes near 15% to the total industrial output, is
expected to display a slowdown in its growth rate in 2009 as its
skyrocketing growth rates in the last 2 years stemmed from
comparatively low base. High demand from Russia and other
neighboring markets is expected to ensure stable orders for industry
for the next 3-4 years.