Russia: Manufacturing PMI dives to record-low in April due to Covid-19
The Russia IHS Markit Manufacturing PMI nosedived to an all-time low of 31.3 in April, from 47.5 in March. As a result, the index plummeted further below the critical 50-threshold, suggesting that manufacturing sector activity declined from the previous month at the fastest pace since records began in September 1997.
The collapse came on the back of a record decline in both output and new orders as coronavirus-related factory closures and lockdowns severely curtailed client demand. Consequently, manufacturing employment decreased at the fastest pace since January 2009 while backlogs of work shrank at the strongest pace since December 2008. In a similar fashion, business confidence plunged to an eight-year low in April. Meanwhile, input prices increased due to a depreciating ruble, with firms passing the cost burden over to their clients through a marked increase in output charges.
Commenting on the report, Sian Jones, an economist at IHS Markit, noted:
“Already-difficult demand conditions across the Russia manufacturing sector were further exacerbated by factory closures and lockdowns following the escalation of the outbreak of COVID-19. Output and new orders contracted at unprecedented rates as domestic and foreign client demand slumped […] We expect industrial production in Russia to decline 3.8% in 2020, as the impact of the COVID-19 outbreak takes hold. Manufacturers remained optimistic of a rise in output in the coming year, but confidence was knocked such that it dropped to a series low.”