Russia: Manufacturing PMI drops to six-month low in November
December 1, 2020
The IHS Markit Russia Manufacturing PMI dived to 46.3 in November, from 46.9 in October, marking the weakest print since May. As a result, the index slipped further below the critical 50-threshold, pointing to quickening deterioration in operating conditions across the Russian manufacturing sector at the end of the year.
November’s downturn came against the backdrop of ongoing restrictions amid soaring number of new Covid-19 cases which dampened client demand and weighed on manufacturing production. New orders dived at the sharpest rate in six months as plunging domestic demand more than offset an upturn in export orders. In a similar fashion, output dropped at the quickest pace since May while the rate of job shedding hit a four-month high in the surveyed month, amid falling backlogs of work. Meanwhile, emerging shortages of raw materials and exchange rate weakness fueled price pressures, with input costs rising at the strongest rate since February 2015. On a more optimistic note, business sentiment rose slightly from the previous month, amid expectations of stronger demand next year.
Commenting on result and the near-term industrial production outlook, Sian Jones, an economist at IHS Markit, said:
"According to PMI data, the overall sector contraction quickened for the second month running, with the fourth quarter set to round off a challenging year for manufacturers. Our current forecast expects industrial production to contract by 5.1% in 2020."
Author: Almanas Stanapedis, Economist