Russia PMI

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Russia: Business activity improves in services while in manufacturing deteriorates

June 4, 2015

The services Purchasing Managers’ Index (PMI) produced by HSBC rose from 50.7 in April to 52.8 in May. As a result, the indicator moved further above the 50-threshold that separates expansion from contraction in business activity in the sector. HSBC stated that May’s improvement was mainly due to an increase in new business, which reflected stronger demand conditions compared to the previous month. HSBC noted that, “May’s increase in service sector new business was the best recorded by the survey since February 2014”, while it concluded that Russian service providers, “remained confident of a rise in activity in the future.”

On the contrary, the manufacturing PMI fell in May after a mild increase in April. The indicator registered 47.6 in May, down from 48.9 in April. May’s result is a four-month low, which brings the indicator further below a 50-threshold that separates expansion from contraction in business conditions in the manufacturing sector. HSBC pointed out that May’s drop was mainly the result of a further deterioration in overall output, new orders and employment. However, the silver lining in May’s result was that firms in the manufacturing sector reported positive developments on the prices front. According to HSBC, inputs-cost inflation continued to fall since January’s record high. These developments are in line with the recent strengthening of the Russian ruble. HSBC concluded that deteriorating conditions in Russia’s manufacturing sector continued in May and is more pronounced in the sectors that produce investment goods. However, the stabilization in prices is welcoming news at a more macroeconomic level that will, in turn, have a positive impact on the manufacturing sector going forward.

FocusEconomics Consensus Forecast panelists see fixed investment contracting 2.9% in 2015, which is down 0.7 percentage points from the previous month’s estimate. For 2016, the panel expects fixed investment to increase 2.0%.


Author:, Senior Economist

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Russia PMI April 2015

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


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