Russia: Activity in manufacturing sector hits four-year high while growth in services moderates
November 3, 2016
Business activity in Russia’s manufacturing sector shifted into a higher gear in October, as suggested by the Manufacturing Purchasing Managers’ Index (PMI) produced by IHS Markit. The indicator rose from 51.1 in September to a four-year high of 52.4. Since the indicator moved further above 50—the threshold that separates expansion from contraction in the sector—it suggests that manufacturing activity is gaining momentum.
Behind the improvement in the headline number were marked increases in manufacturing production, new orders and outstanding business. On the other hand, downward pressures come from further job cuts. Meanwhile, Russian goods producers that responded to the October survey indicated that inventories declined at a substantial pace and input and output prices increased markedly from the previous month.
On the services front, businesses signaled that their activity continued to grow in October, although at a more moderate pace. According to IHS Markit, the Services Purchasing Managers’ Index edged down from 53.0 in September to 52.7. This marked a third consecutive month of moderation and the lowest level in five months. It reflected new business deals, although the pace of increase slowed further. Also, business firms reported that outstanding business levels accumulated again in October. Meanwhile, further job cuts were also evident in the services sector.
Author: Ricardo Aceves, Senior Economist