Page 43 - RusRPTApr20

4.3 Industrial sectors and trade 4.3.1 Producers PMI
It is still too early for the full impact of the double whammy of the oil prices crash and the manufacturing and retail coronavirus (COVID-19) pandemic-related stop shock on Russia’s IHS Markit Russia Manufacturing Purchasing Index (PMI) to show, but the index was already sliding in March before the storm broke at the end of the month.
The headline seasonally adjusted IHS Markit Russia Manufacturing PMI dropped from 48.2 in February to 47.5 at the end of the first quarter. The decline in operating conditions across the sector was the strongest for three months. Any result below the 50 no-change mark is a contraction.
First in, first out; China's PMI was especially hard hit by the epidemic and its PMI fell to an all time low of 35.7 in the worst month in February. However, in the March result the index bounced back to well over 50 in a V-shaped recovery. Russia is just going into its worst month now.
Russia’s own coronavirus epidemic has taken off later than most of the other countries in the region, but as of April 1 the official number of reported cases had reached 2,337, up from only two a month earlier. Moscow was only locked down on March 30 and the rest of the regional cities are likely to follow in the first week of April.
The changes in the March manufacturing PMI are related to the growth of the virus elsewhere that was increasingly unsettling businesspeople, but the impact of Russia’s own epidemic will only be clear in the April results.
As a result of the escalating crisis in the rest of Europe, business confidence dropped to a series low as firms expressed uncertainty towards the global economic outlook following the outbreak. Nonetheless, employment was broadly unchanged despite a strong fall in backlogs of work, reports Markit.
The headline figure was also slightly buoyed by a solid deterioration in vendor performance. A key factor behind the latest overall contraction was a solid decrease in production. Although a number of firms stated that greater
43 RUSSIA Country Report April 2020 www.intellinews.com