Russia: Manufacturing and service upturn strengthens further in December
December 30, 2016
Activity in Russia’s manufacturing sector expanded at the fastest pace in 69 months in December, as suggested by the Manufacturing Purchasing Managers’ Index (PMI) produced by IHS Markit. The indicator edged up from 53.6 in November to 53.7. The fact that the indicator moved further above 50—the threshold that separates expansion from contraction in the sector—suggests that manufacturing activity accelerated at the end of the year.
Russian good producers increased their production at a substantial pace in December and, according to IHS Markit, the sharpest increase in output was seen in the investment goods sub-category. In the same line, new businesses continued to increase in the final month of 2016, driven mainly by domestic orders rather than new business from abroad. Due to the increase in new orders, Russian manufacturers increased their workforce in December, with job creation increasing at the fastest rate in five and a half years in December.
Regarding services, businesses showed a substantial increase in December. According to IHS Markit, the Services Purchasing Managers’ Index rose to 56.5 in December from 54.7 in November. The improvement mainly reflected that growth in activity and new business had strengthened from the previous month. IHS Markit noted that, “all six services sub-sectors experienced output growth in December, with financial intermediation registering a particularly sharp increase in output.”
Author: Ricardo Aceves, Senior Economist