Russian factory activity rebounds at pre-February 24 pace – PMI

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An employee works on the production of traffic signs at a KrasDorZnak factory in the Siberian village of Voznesenka, Krasnoyarsk region, Russia May 29, 2019. REUTERS/Ilya Naymushin

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  • This content was produced in Russia where the law limits coverage of Russian military operations in Ukraine

MOSCOW, Sept 1 (Reuters) – Activity in Russia’s manufacturing sector rose in August at the fastest pace since January, driven by stronger domestic demand that boosted sales, a business survey showed on Thursday.

The S&P Global Purchasing Managers’ Index (PMI) rose in August to 51.7 from 50.3 the previous month, topping the 50.0 mark that separates expansions in activity from contractions.

The sector’s output rose in August after six months of contraction that began in February, the month Russia sent tens of thousands of troops to Ukraine, triggering unprecedented Western sanctions against Russia.

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The rise in production was linked to stronger customer demand and an increase in new order intake, S&P Global said in a monthly survey.

The increase in new sales in August was the fastest since April 2019, with companies citing new customer acquisition and stronger customer demand in the domestic market.

But new export orders fell for the seventh consecutive month and the rate of contraction hit a three-month high.

The cost burden continued to rise in August, but at its slowest pace since February 2020, as companies raised selling prices to pass on higher costs to customers.

Business confidence among Russian manufacturers remained upbeat even as economic headwinds remained, the survey showed.

“Optimism was reportedly driven by hopes of greater customer demand and investment in marketing and advertising. Confidence levels, however, were below the series average, as economic uncertainty weighed on sentiment,” S&P Global said.

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Reporting by Andrey Ostroukh; Editing by Hugh Lawson

Our standards: The Thomson Reuters Trust Principles.

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