Page 105 - RusRPTAug24

since October 2023, driven by higher raw material, transportation, and supplier costs, as well as unfavourable exchange rate movements. Although companies raised selling prices in response, the rate of charge inflation was lower than in June but still above the historic average.
Vendor performance worsened, with supplier delivery times lengthening to the greatest extent in ten months. This, combined with efforts to build stockpiles amid uncertain material supplies, led to contractions in pre- and post-production inventories. The pace of inventory depletion for finished goods was the fastest since November 2023. Despite these challenges, Russian manufacturers maintained a positive outlook for the coming 12 months.
The seasonally adjusted S&P Global Russia Manufacturing Purchasing Managers’ Index (PMI) was up slight in June to 54.9, up from 54.4 in May, as Russia’s productive sector enjoyed the fastest pace of growth in three months, thanks to the ongoing war spending.
Russia is currently enjoying the fast growth in its manufacturing PMI in Europe, where many of the leading economies are seeing their PMIs contract, posting index results at below the 50 no-change benchmark.
“Operating conditions improved at a strong rate, amid steep increases in output and new orders. Meanwhile, sustained demand conditions encouraged firms to take on additional staff, as employment rose at the fastest rate on record,” S&P Global said in a press release on July 1. “Companies also stepped up their input buying, as some looked to build safety stocks as business confidence ticked higher.”
Inflation remains the fly in the ointment with input prices rising at the fastest pace since November 2023, but accommodative demand conditions allowed firms to raise their selling prices at a sharper rate.
And demand remains strong as the economy is running very hot, thanks to the war in Ukraine. Russian goods producers continued to register a sharp expansion in new orders midway through the year, with the pace of growth quickening. S&P Global’s panellists often stated that greater new sales were linked to sustained demand conditions and new client wins.
Moreover, foreign customer demand improved in June, as new export orders returned to growth for the first time in three months, as Russia reorientates is trade to the Global South where it has many willing customers.
“Production rose at a steep pace amid a stronger expansion in new orders. Moreover, the pace of increase in output was among the fastest in seven-and-a-half years,” S&P Global reports.
Employment growth was in part to alleviate pressure on capacity, with
105 RUSSIA Country Report August 2024 www.intellinews.com