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for CPI, Rosstat applies the consumption structure, in the case of PPI, it uses the amount of goods produced. Given this, in a sense the PPI basket is closer to that for IP, with the weight of oil-linked industries in the basket close to 28%. It implies the contribution of oil-triggered inflation at about 11pp out of the +16.1% y/y total growth.
4.3 Industrial sectors and trade 4.3.1 Producers PMI
Russia’s manufacturing PMI falls to a five-month low in February, but manufacturers are optimistic about 2019
Russia’s manufacturing sector failed to pick up any momentum in January and the IHS Markit manufacturing PMI fell to a five-month low in February of 50.1 in February, down slightly from 50.9 in January and just above the 50.0 no- change mark.
“Russian manufacturing firms registered broadly unchanged operating conditions in February, with the headline PMI dipping to a five-month low. Although output growth picked up slightly, the upturn in new business softened and was the slowest since last September. Moreover, foreign client demand fell further and new export orders contracted at the quickest rate since April 2017. Nonetheless, firms remained upbeat and optimism reached it's second- highest since May 2013,” Markit said in a press release.
Russia’s industrial sector has been spluttering in 2018 and while it has made gains they are far below potential. The results have been weighed down by a number of factors, despite a controversial upgrade to 2.3% growth in 2018, the lack of private investment, soggy commercial borrowing and real incomes in Russia fell again slightly in 2018, down for the fifth year in a row.
Russia’s manufacturing industry grew by 2.6% in 2018, Industry and Trade Minister Denis Manturov said during the working meeting with President Vladimir Putin on February 25. And the results didn't improve in January when industrial output slowed again to 1.1% y/y from 2% in December 2018, Rosstat reported on February 18.
38 RUSSIA Country Report March 2019 www.intellinews.com