Russia: Manufacturing PMI slips again in February
The manufacturing Purchasing Managers’ Index (PMI) produced by IHS Markit dipped from 50.9 in January to 50.1 in February, marking the third consecutive monthly drop and the weakest reading since September 2018. As a result, the index inched down closer to the critical 50-point mark separating expansion from contraction in activity in the manufacturing sector, signaling broadly steady operating conditions compared to last month in February.
February’s downturn reflected cooling new orders growth, largely due to tumbling export orders, which more than offset a marginal pick up in output growth. Nevertheless, firms increased hiring in February, reversing a brief contraction in hiring in the previous month. In addition, business confidence improved in the surveyed month, surging to it’s second-highest level since May 2013. On the inflation front, price pressures moderated somewhat compared to January, although remained elevated due to the VAT hike at the start of the year.
Commenting on the survey results, Sian Jones, an economist at IHS Markit, added:
“Weaker global demand conditions and the impact of the recent hike in VAT dented growth across the Russian manufacturing sector. Although the upturn in output quickened, the rise was only fractional and operating conditions were broadly unchanged in February.”