Russia: Upturn in manufacturing and services strengthens in January
January 30, 2016
Russia’s manufacturing activity shifted into a higher gear at the beginning of 2017, according to the Manufacturing Purchasing Managers’ Index (PMI) produced by IHS Markit. The indicator rose to 54.7 in January from 53.7 in December. The fact that the indicator moved further above 50—the threshold that separates expansion from contraction in the sector—suggests that manufacturing activity continued to accelerate at the beginning of 2017.
Manufacturers continued to increase production in January, reflecting a sharp increase in new orders. Also, backlogs increased at the fastest pace since August 2006, leading goods producers to substantially increase their staff levels. Meanwhile, both input and output prices increased over the previous month. IHS Markit highlighted that Russian manufacturers “continued to go from strength to strength, supported by robust demand for goods from domestic clients.”
Regarding services, businesses showed another substantial increase in January. According to IHS Markit, the Services PMI rose to 58.4 in January from 56.5 in December, hitting an eight-and-a-half year high. The improvement in January reflected a further improvement in new business, prompting service businesses to increase their payrolls. IHS Markit noted also that business confidence among service providers reached its highest level in 44 months, “with companies expecting new product launches to help boost future business activity.”
Author: Ricardo Aceves, Senior Economist