Position of the Company in the Industry

• 2.1 Region Included in the Company Area of Service – St. St. Petersburg
• 2.2 Region Included in the Company Area of Service – Leningrad Region
• 2.3 Competitive Environment

Region Included in the Company Area of Service – St. St. Petersburg

Despite deterioration in the Russian economy in comparison with the pre-crisis period, the development of the St. Petersburg economy in 2010 was performed according to the main principles provided by the Concept of its social and economic development⁵. Diversified structure, high level of development of financial and bank infrastructure, availability of modern trade networks and a capacious consumer market, as well as a high level of competitiveness of a number of manufactures are still among the strengths of the region’s economy.

The diversified structure of the city economy combined with a high rate of institutional and structural reforms in the Russian Federation, giving St. Petersburg one of the leading positions in the country in terms of competitiveness, and creates preconditions for attraction of investments and successful development of perspective industries of the city economy. At the same time, there can be noted an insufficiently high export-oriented economy, and considerable depreciation of basic production assets.

The social sphere was among main priorities for the Government of St. Petersburg in 2010. Great attention was given to health services and education. Improvement of demographic indicators was recorded in the region: birth rate growth has proceeded, whereas the death rate has decreased.

In general, with respect to the key regional macroeconomic indicators, the following can be noted: the value of the consumer price index for St. Petersburg in 2010 constituted 109.4 % which is slightly (0.9 percentage points) above the level of the previous year, and exceeds the all-Russian CPI following the results of 2009 (108.8%). Growth of the industrial production index, the volume of investments into fixed capital, and growth of balanced financial result of the enterprises was thus observed. Industry, which is the leading sector of the city economy, developed intensively. In 2010, the dynamics of industrial production advanced faster than the average Russian indicators. The situation in the construction industry has improved. In addition, there was growth of foreign trade turnover accompanied by an increase of export and import, although the trade balance remains negative.

Improvement on a number of indicators of social and economic development of the region shows signs of stabilization of the economic situation in comparison with the last reporting year.

Actions of the Government of St. Petersburg in 2010 were directed not only at economic restoration, but also at quickening positive tendencies of its development, which has found reflection in "the Basic events of activity of the City government on stabilization of the economy and provision of steady social and economic development of St. Petersburg for 2010".

The basic priorities of the Government of St. Petersburg in the reporting year were as follows:

• support of social and economic stability and provision of stability of economic development;
• stimulation of economic growth (assistance at employment of the population, provision of effective social protection, support of the real sector of economy, development of housing construction and road and transport infrastructure);
• economic modernization (increasing investment activity of the enterprises of St. Petersburg, support of innovative-active business).

Creation of conditions and preconditions for the most efficient control of budgetary funds according to the state policy priorities has proceeded on a continuous basis.

⁵ The concept of social and economic development of Saint Petersburg for the period till 2025 was approved by the Governmental order of Saint Petersburg as of July 20, 2007 No.884