Russia PMI July 2017

Russia

Russia: Economic conditions mixed in July

August 3, 2017

Business activity in Russia’s manufacturing sector picked up in July. The Manufacturing Purchasing Managers’ Index (PMI) produced by IHS Markit rose from 50.3 in June to a six-month high of 52.7 in July. As a result, the PMI moved further above the 50-threshold that separates expansion from contraction in the sector.

The rise was driven by robust output and new orders, which both recorded the best performances seen in six months. In addition, the level of outstanding business rose at the sharpest pace on record. Employment, however, continued to drop, although at a more subdued pace than in the previous month. Meanwhile, input price pressures eased.

Regarding the services sector, activity weakened in July and the Services PMI dropped from 55.5 in June to 52.6. The reading marked the worst result since May 2016. According to IHS Markit, business confidence fell to the lowest level seen so far this year and many service providers expressed concerns regarding demand.

FocusEconomics Consensus Forecast panelists project Russia’s gross fixed investment to expand 2.3% in 2017, which is up 0.3 percentage points from last month’s forecast. Panelists expect the economy to expand 2.9% in 2018.


Author: Angela Bouzanis, Senior Economist

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