Russia: Manufacturing PMI rises to six-month high in February
The Russia IHS Markit Manufacturing PMI rose to 48.2 in February, from 47.9 in January, marking the best result since August 2019. That said, the index remained below the critical 50-threshold, suggesting that activity in the manufacturing sector contracted for a tenth month running in February.
The improvement was mostly driven by a slower contraction in new business with new orders declining at the softest rate since July 2019 amid signs of somewhat less downbeat external demand. That said, Russian manufacturers cut output again in Febraury as overall demand conditions remained generally weak. Meanwhile, on the price front, despite subdued inflationary pressures, firms raised their output charges at a faster pace in February.
Commenting on the report, Sian Jones, an economist at IHS Markit, noted:
“Weak demand continued to weigh on the Russian manufacturing sector […] in February. The decline in total sales eased, however, as the sector showed some signs of recovering despite challenging domestic demand conditions. Although our latest forecast points to accelerations in industrial production growth in the opening two quarters of 2020, manufacturers remain hesitant regarding their output expectations for the year ahead. Alongside softer business confidence, firms reduced employment at a sharper pace midway through the first quarter.”