Markit: Russia’s Manufacturing PMI falls to 49.8 in May

MOSCOW, Jun 3 (PRIME) -- Russia’s Manufacturing purchasing managers' index (PMI) fell to 49.8 in May from 51.8 in April, decreasing beyond the 50 no-change mark, which means overall deterioration, IHS Markit said in a research note on Monday.

The latest headline PMI signalled the first deterioration in operating conditions for nine months. However, the overall contraction was only fractional overall.

The latest survey data signalled the first deterioration in the health of the Russian manufacturing sector since August 2018 in May. The contraction was driven by a faster decline in employment and softer expansions in output and new orders. New business growth eased further from March's recent high, as new export orders fell for the fourth time in the last five months.

"Inflationary pressures eased further from January's recent record. Although input costs increased solidly, factory gate charges rose at the slowest rate since March 2018 amid softer demand conditions and greater competition. Nevertheless, goods producers remained strongly optimistic of a rise in output over the coming year,” Sian Jones, researcher at HIS Markit, said, as cited in the report.

Production across the Russian manufacturing sector increased only fractionally in May. The rate of expansion softened notably from March's recent peak and was below the series trend. While more efficient production processes helped stimulate growth, subdued demand acted as a hindrance.

‘Firms reduced their workforce numbers for the second successive month. The decrease in employment was solid and the fastest since March 2016,” the research said.

“Anecdotal evidence attributed the latest decline in staffing levels to softer demand conditions and the non-replacement of voluntary leavers. Reports of more efficient production processes also allowed firms to continue to clear backlogs at a strong rate, as pressure on capacity was reduced.

End