Russia: Manufacturing PMI hits highest reading since May 2021 in January
The IHS Markit Manufacturing Purchasing Managers’ Index (PMI) came in at 51.8 in January, up from December’s 51.6. By moving marginally further above the 50-threshold, the result signaled a faster improvement in business conditions compared to the previous month. January’s result marked the strongest reading since May 2021.
January’s slight improvement came on the back of studier new orders growth, which was the joint-strongest since April 2019 thanks to healthier business and consumer spending both at home and abroad. As a result, backlogs of work rose for the first time in over four years, in response to which manufacturing firms increased payrolls at the sharpest rate since November 2018.
Less positively, capacity constraints further dented manufacturing output growth, which was the slowest in four months at the outset of 2022. Lastly, supplier delivery delays and raw material shortages pushed input price inflation to a six-month high, which led to a sharp rise in output charges.
Commenting on the private sector outlook, Siân Jones, senior economist at IHS Markit, highlighted inflationary risks, saying:
“Inflationary pressures remained marked in January, as cost burdens rose at the sharpest pace since last July. Firms were able to pass through higher input prices to clients, however, as output charge inflation quickened. As headwinds from higher costs do not look likely to dissipate in the near-term, pressure on margins is expected to persist across the Russian manufacturing sector in 2022.”