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4.2.2 PPI dynamics
Producer prices were down 3.2% y/y/-1.4% m/m (VTBC estimate was 3.4% y/y/1.4% m/m) in March on the back of an oil price slump.
4.3 Industrial sectors and trade 4.3.1 Producers PMI
No surprise here. The coronavirus (COVID-19) epidemic in Russia has caused an unprecedented collapse of Russia’s IHS Markit Russia Manufacturing Purchasing Index (PMI) in March.
The headline seasonally adjusted manufacturing PMI posted 31.3 in April, crashing from the 47.5 it posted in March as the full weight of the double blows of an oil price collapse and the virus-related stop-shock struck home.
The result is almost as bad as the collapse of China’s manufacturing PMI to 26.5 in February from 51.8 in January during the worst part of its own outbreak – the worst result ever and the first time ever China scored less than the 50 no-change mark in the last 15 years.
China’s PMI index bounced back from its February crash, but it is not clear if Russia will do the same as the number of infections is rising unabated at the moment. The collapse of Russia’s manufacturing PMI shows the worst deterioration in operating conditions across the Russian manufacturing sector since Markit began collecting data in September 1997.
Emergency public health measures to halt the spread of the coronavirus were imposed on March 30 when Moscow was put on lockdown and were then rapidly rolled out in another 53 from Russia’s 86 regions. That led to factory closures and a marked reduction in client demand.
“Although firms remained optimistic of an increase in output over the coming year, expectations dropped to a series low (since April 2012) and workforce numbers were reduced steeply,” Markit said in a press release.
37 RUSSIA Country Report May 2020 www.intellinews.com
