Fixed investment is the purchasing of newly produced fixed capital in physical assets such as machinery, land, buildings, installations, vehicles, or technology. It is measured as a flow variable, as an amount per unit of time.
“The monthly fixed investment dynamics of capital investments, taking into account seasonality and calendar, remains volatile. After growth in the previous month, investments in fixed assets decreased slightly,” the central bank said in a statement.
Failure to keep to the spending plan on the 25.7 trillion ruble ($390 billion) investments planned for the 12 national projects is believed to be the main reason for the fall in fixed investment.
At the end of May 2019, only 20 percent of the spending planned for more than half of the national projects had been executed, the regulator said.
At the same time, investment activity in the industry remained depressed over the first half of this year. According to market surveys by the Institute for Economic Policies Yegor Gaidar, industry investment plans lost all momentum between the beginning of the year and April, falling by between +15 and –2 points. By May, fixed investment activity fell to near zero.
An indicator of the low investment activity has been the dynamics of the import of machinery and equipment from foreign countries, which also deteriorated in May, despite the strengthening of the ruble, which makes imports cheaper. In annual terms, the import of machinery fell by 11.1% after rising by 5.2% in April, which is only partially explained by the calendar factor. The central bank emphasizes that the fall in investment imports was observed in all key commodity items.