Russia PMI

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Russia: Contraction in manufacturing moderates while in services is more pronounced

March 4, 2015

The manufacturing Purchasing Managers’ Index (PMI) elaborated by HSBC rose from 47.6 in January to 49.7 in February, which marked the first increase in the index after two consecutive months of decline and after the PMI touched its lowest level since June 2009. That said, the indicator is still below the 50-threshold that separates expansion from contraction in business activity in the sector. According to HSBC, “Russian manufacturing business conditions deteriorated only fractionally in February, as stronger domestic demand drove an increase in new work and production rose slightly.”

HSCB noted that February’s result reflected that, “output and new orders both had positive contributions in February, while employment continued to weigh on the PMI, albeit to a lesser extent.” Respondents to the February survey pointed out that although input prices moderated in February, the overall level continued to be high. Manufacturers attributed high prices to the still weak Russian ruble.

Meanwhile, the services PMI fell further in February. The indicator decreased from 43.9 in January to 41.3 in February, falling deeper below the neutral 50-threshold. The services PMI seats now at its lowest since March 2009. According to HSBC, the reading signaled a sharper deterioration in business conditions in the Russian services sector. In addition, outstanding business and employment deteriorated notably over the previous month. HSBC also noted that the outlook for the Russian services sector in the next 12 months deteriorated for the fourth consecutive month.

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 February 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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