Russia: Manufacturing PMI improves in May
The S&P Global Manufacturing Purchasing Managers’ Index (PMI) came in at 50.8 in May, up from April’s 48.2. As such, the index rose above the 50.0 no-change mark, signaling an improvement in business conditions from the previous month.
May’s reading signaled a renewed upturn in the performance of the Russian manufacturing sector following three months of contractionary conditions. Softer downturns in manufacturing output, new business, employment levels and stocks of purchases all contributed to the improvement in the headline reading. That said, new orders continued to decline at a relatively rapid pace, chiefly due to sinking new export orders due to international sanctions, which underpinned yet another strong fall in output.
Meanwhile, inflationary pressures receded somewhat, as the rate of cost inflation softened to the slowest since July 2020. Lastly, business confidence across the Russian manufacturing sector rose to the highest level since the beginning of Russia-Ukraine war, as manufacturing firms were more certain of greater client demand in the coming 12 months. This pushed the overall reading higher in May.
Currently, the Consensus sees fixed investment falling 20.0% in 2022, which is up 0.6 percentage points from last month’s projection. For 2023, panelists see fixed investment contracting 2.6%.