Russia PMI September 2016


Russia: Activity in manufacturing sector improves in September

October 3, 2016

Business activity in Russia’s manufacturing sector continues to show signs of improvement. The Manufacturing Purchasing Managers’ Index (PMI) produced by IHS Markit rose from 50.8 in August to 51.1 in September, which was a second consecutive improvement. The indicator remains above 50, meaning that the sector remains in expansion mode.

In a press release, IHS Markit attributed the upturn in the sector to “the sharpest rise in production for 22 months, while new order intakes also increased at a solid pace.” The increase in output reflected higher demand for Russian manufactured goods and the introduction of new products. Demand stemmed mainly from the domestic market as new exports continued to decrease. Despite an increase in production, however, Russian goods producers decided to further reduce their staff levels. Meanwhile, firms indicated that input and output prices continued to rise in September.

According to IHS Markit, “in comparison to recent times, September was a strong month for Russia’s manufacturers […]. However, the latest increase in production was fractionally weaker than the historical average, indicating that the sector is still far from performing at maximum capacity.”

Analysts surveyed by FocusEconomics expect the Russian economy to continue contracting in 2016, although at a more moderate pace than in 2015. Our panelists project that Russia’s GDP will fall 0.6% in 2016, which is up 0.1 percentage points from last month’s forecast. Panelists expect the economy to expand 1.3% in 2017.

Author:, Senior Economist

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Russia PMI Chart

Russia PMI Manufacturing September 2016 1

Note: IHS Markit Manufacturing Purchasing Managers’ Index (PMI). A reading above 50 indicates an expansion in business activity while a value below 50 points to a contraction.
Source: IHS Markit.

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