Russia: Manufacturing sector loses steam; services sector picks up in February
March 5, 2018
Business conditions in Russia’s manufacturing sector deteriorated in February. The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, fell from 52.1 in January to 50.2 in February, the worst result since July 2016. As a result, the PMI lies only slightly above the 50-threshold that separates expansion from contraction in business activity in the sector.
According to IHS Markit, growth in new orders and output slumped, driving the downturn in the index and signaling fragile demand for Russian goods. Subdued demand caused firms to reduce purchasing activity, and employment dropped for a second consecutive month. Inflationary pressures were modest in February. Meanwhile, business confidence, which hit a five-month high, was a bright spot in the survey.
In contrast, activity in the services sector picked up pace. The Services Business Activity Index produced by IHS Markit rose from 55.1 in January to 56.5 in February. As a result, the indicator remains firmly in expansionary territory on the back of solid demand from new and existing customers.
Russia Fixed Investment Forecast
FocusEconomics Consensus Forecast panelists project fixed investment will expand 2.7% in 2018, which is down 0.1 percentage points from last month’s forecast. In 2019, the panel expects fixed investment to grow 2.4%.