Russia: Manufacturing PMI improves slightly bur remains in contractionary territory in July
August 1, 2019
The manufacturing Purchasing Managers’ Index (PMI) produced by IHS Markit edged up to 49.3% in July, from 48.6 in June. As a result, the index remained below the critical 50-point mark, signaling that activity in the manufacturing sector contracted for the third consecutive month.
July’s reading reflected a sustained deterioration in new business activity, amid softening demand conditions at home as well as abroad with new export orders slumping at the fastest pace in five months. In addition, output declined for a second consecutive month, weighed on by laxer purchasing power among households. Weak client demand also prompted a drop in backlogs of work. On a more positive note, Russian manufacturers increased workforce numbers for the first time in four months in July. Meanwhile, inflationary pressures softened considerably in July, with output prices hardly rising thanks to the slowest increase in input costs since February 2017 and greater discounting. Lastly, sentiment over future output fell to a one-year low in July.
Author: Almanas Stanapedis, Economist