Russia: Manufacturing PMI jumps to over two-year high in May
June 1, 2021
The IHS Markit Manufacturing Purchasing Managers’ Index (PMI) came in at 51.9 in May, up from April's 50.4. May's result marked the strongest reading since March 2019. Consequently, the index moved further above the 50-threshold, signaling a faster improvement in business conditions compared to the previous month.
The upturn was mostly driven by a stronger manufacturing output growth stemming from a rebound in new business and stronger client demand both at home and from abroad. Moreover, despite sustained decline in the backlogs of work, the rate of job creation quickened and was the strongest since December 2018 in May. Meanwhile, inflationary pressures remained elevated in May, although stronger demand conditions allowed firms to partially pass on higher costs to their clients. That said, inflationary concerns drove a decline in business confidence in May.
Commenting on the result, Sian Jones, an economist at IHS Markit, said:
"A theme sustained into May data were significant supply-chain disruptions. Delays lengthened to the greatest extent for a year and input prices rose markedly. Manufacturers were the least upbeat since January, as concerns regarding prices and client purchasing power weighed on confidence. Nonetheless, our current forecast anticipates a near 3% year-on-year increase in industrial production during 2021."
Author: Almanas Stanapedis, Research Team Manager