Page 33 - RusRPTNov18

4.3 Industrial sectors and trade 4.3.1 Producers PMI
Russia’s manufacturing sector gained a little momentum over the summer as the IHS Markit Russia Manufacturing Purchasing Managers (PMI) went back into the black printing a gain of 51.3 in October, up from September’s 50 that represents no change month-on-month.
Russia economy returned to growth this year, but the expansion has been anaemic and industry has struggled to gain any momentum.
Russia’s industrial production results that run in parallel to the manufacturing PMI have also been disappointing. Russia's industrial output growth continued to slow in September 2018, down to 2.1% year-on-year from 2.7% seen in August and 3.9% in July, the latest data by Rosstat statistics agency release on October 16 shows. The industrial growth for 3Q18 slowed to 2.9% y/y from 3.2% in 2Q18, amounting to 3% y/y in January-September 2018.
Likewise, the manufacturing PMI has been bouncing about around the 50 no-change mark . The index was just over 50 for the first three months of this year, but dipped below the no-change market between May and August, and was flat in September.
At the same time the Markit composite index, that includes services, has done better, held up by the strong growth in the services sector that is in part driven by the rapidly expanding e-commerce sector. The PMI composite index was 52.1 in September and has been running at between 51 and 55 all year.
Drilling into the details of the manufacturing index and Markit noted that October’s result was the the first monthly improvement in operating conditions since April.
“Overall performance across the goods-producing sector was supported by solid and faster expansions in output and new orders, with foreign demand also increasing. Encouragingly, employment growth accelerated to the quickest since January 2017 as pressure on capacity became more apparent. In line with firmer client demand, firms expressed a robust degree of optimism towards future output,” Markit said in its press release.
Key to the manufacturing sector regaining growth momentum was a faster increase in output in October . The solid expansion was the strongest in six months and largely attributed to a sustained upturn in new business and greater client demand.
Growth in new business received by goods producers accelerated to the fastest since January amid reports of new client acquisitions and new product launches. The moderate expansion in new orders was supported by foreign client demand, with new export orders increasing solidly, Markit reports.
Greater production requirements also drove a first monthly rise in input buying since April . Moreover, the increase in purchasing activity was the
33 RUSSIA Country Report November 2018 www.intellinews.com