Russia: Manufacturing PMI drops in September
October 1, 2020
The IHS Markit Russia Manufacturing PMI dipped to 48.9 in September, from 51.1 in August. As a result, the index slid below the critical 50-threshold, signaling that operating conditions across the Russian manufacturing deteriorated at the end of Q3.
The downturn was chiefly driven by a drop in new business due to weakening client demand at home, cancelled projects and shrinking export sales. Moreover, the rate of job shedding quickened in September, amid weak order inflows and excess capacity.
That said, manufacturing production increased at a solid rate, as firms resumed operations following the lifting of Covid-19-related restrictions, with backlogs of work decreasing marginally. With regards to sentiment, manufacturers’ confidence dipped to a four-month low. Lastly, input costs continued to rise rapidly in the month, albeit at a softer pace than in August. In response, firms raised their selling prices at a faster pace.
Commenting on the manufacturing sector outlook, Sian Jones, an economist at IHS Markit, said:
"The recovery across the Russian manufacturing sector lost momentum in September, as weak client demand hampered any improvement in overall operating conditions. […] With uncertainty in the global economy prevailing and domestic demand struggling for momentum, there remains a long recovery path ahead for the manufacturing sector."
Author: Almanas Stanapedis, Research Team Manager