Page 46 - RusRPTDec23

“The Russian manufacturing sector reported sustained growth midway through the final quarter of 2023. New orders continued to expand sharply in November, despite a dip in exports, supporting further increases in output, employment and purchasing activity,” S&P Global reports. “Meanwhile, stocks of inputs were raised for the first time in seven months. Although companies recorded further marked increases in input costs and selling prices, rates of inflation eased markedly amid some signs of currency stabilisation.”
By contrast, the latest EU PMI results remain deeply in the red. Eurozone manufacturing PMI increased by 1.1pts to 44.2 in November as the cost of supporting Ukraine and elevated inflation and energy prices drag Europe down, although there are signs that the worst has passed.
“While it remains in contractionary territory, suggesting a broad-based weakness across eurozone countries, the pace of declines in output and new orders has slowed while expectations improved [in Europe],” S&P Global said.
In Russia, the key positive from the latest survey was another sharp increase in new orders, with the rate of expansion only slightly softer than that seen in October, when new business had risen to the largest extent since March 2011, S&P Global said.
“While demand overall remained buoyant, data suggested that this was mainly centred on domestic customers as new export orders decreased for the first time in four months. The pace of reduction was only marginal, however,” S&P Global said. “Continued marked improvements in total new orders meant that manufacturers increased their production again in November. The rate of expansion was solid, albeit softer than in October. The latest rise was the sixteenth in as many months.” The war has drained the Russian labour market, leaving unemployment at historic lows. Rising demand has only put extra pressure on employers who are struggling to find workers, which in turn is driving up wages and hence inflation, which remains a serious problem.
However, the rapid growth of wages in Russia, caused by a sharp shortage of workers due to war and mobilization, has ended, writes RBC.
Official statistics clearly indicate this. In September, real wages grew by 7.2% in annual terms against 9.5% in August, nominal accrued wages by 13.6% against 15.1% a month earlier. The unemployment rate is at a historical low of 2.9%.
According to the forecast of the Ministry of Economic Development, in 2024–2026, real wages will grow by 2.5% per year, nominal wages by 7.7%.
Manufacturers looked to expand their workforce capacity again in November in response to higher new orders, through a combination of increased working
46 RUSSIA Country Report December 2023 www.intellinews.com