Russian real sector data for November were mixed. The main negative trends were in real retail sales, which declined sharply, and increased unemployment. Positive indications came from slight improvements in industrial production and investment and a substantial improvement in real wages; in all cases, y/y changes remained negative (other than for unemployment, which is rising).

Consumption indicators in November point to continued declines with real retail sales gapping lower to -13.1% y/y. While our forecast had envisioned further slight decay, consensus expected some improvement.

"We think this signals consumption will very likely decline in Q4 and this will cause the recession to be extended for at least a sixth quarter, in our view. As an offset, there was strong improvement in real wages, to -9.0% y/y. Though an improvement was anticipated in forecasts, the magnitude of the improvement was greater than expected", says Barclays.

Production indicators in November provided more evidence that stabilisation is underway. Industrial production improved slightly to -3.5% y/y, the sixth consecutive monthly improvement. However, the seasonally adjusted index points to further declines in the level of production in November. Likewise, PMI remained slightly above the neutral "50" level for the second month, implying stable production in the future. Investment improved to -4.9% y/y, the fourth month of improvements. Profits have increased in 2015, particularly in the energy sector, because of the RUB depreciation and supporting recovery in investment.