Russia: Manufacturing PMI records worst reading since November 2020 in August
September 1, 2021
The IHS Markit Manufacturing Purchasing Managers' Index (PMI) fell to 46.5 in August from July's 47.5. August's result marked the weakest reading since November. As a result, the index fell further below the 50-threshold, signaling a sharper deterioration in business conditions compared to the previous month.
The downturn came on the back of contracting new orders and output. Softer domestic and foreign demand drove the sharpest drop in new business in 10 months, while output fell at the fastest pace in over a year. In turn, backlogs of work continued to fall in August, while job shedding gathered pace and was the sharpest since November 2020. More positively, while price pressures eased somewhat in August, manufacturers were able to increase output charges at a faster pace, protecting profit margins. Lastly, views on the outlook for output improved mid-way through the quarter, on hopes of greater client demand in the months ahead.
Commenting on the inflationary backdrop, Siân Jones, a senior economist at IHS Markit, said:
"Although price pressure remained historically marked, there was a notable slowdown in the rate of cost inflation as input prices rose at the softest pace for almost a year. Firms stepped up their efforts to defend margins in August, as charges increased at an accelerated rate."
Author: Almanas Stanapedis, Research Team Manager