Page 52 - bneIntelliNews monthly country report Russia May 2024

4.3 Industrial sectors and trade 4.3.1 Producers PMI
Russia's composite PMI index increased by 0.5 points in March (after declining by 2.9 points in February) to 52.7. At the same time, PMI in the industrial sector has shown steady growth since the beginning of the year.
Key business sentiment indicators, such as the central bank’s business climate indicator and optimism in industry, are running high. The manufacturing purchasers’ managers index (PMI), a key reading of business confidence, has reached its highest level in almost 18 years. Even though businesses have a positive view of their future, they lack the capacity to increase supply and keep pace with demand. There is little free manpower in the economy and as a result, salaries will continue to rise, outpacing labor productivity (which is also inhibited by tech sanctions). These dynamics underpin the growth in domestic demand as well as non-oil and gas budget revenues in nominal terms, but also lead to an acceleration in inflation.
52 RUSSIA Country Report May 2024 www.intellinews.com