Russian factory activity shrinks in April – S&P Global

Russia’s manufacturing sector remained in decline in April, according to S&P Global, though the pace of contraction eased, with firms showing renewed optimism and purchasing activity returning to growth.

The S&P Global Russia Manufacturing Purchasing Managers’ Index (PMI) rose to 49.3 in April from 48.2 in March, remaining below the 50.0 mark that separates expansion from contraction for a second consecutive month. The deterioration in operating conditions was described as marginal.

Production and new orders both declined, albeit at softer rates, with firms citing subdued domestic and export demand, reduced purchasing power, and greater competition. However, input buying rose for the first time in three months as companies built safety stocks amid stabilising supplier delivery times.

Employment fell modestly following three months of growth, as firms refrained from replacing voluntary leavers due to adequate capacity. Backlogs of work fell at the fastest rate in two and a half years.

Price pressures continued to ease, while input cost inflation slowed for a fifth consecutive month, aided by favourable exchange rate movements, leading to the weakest output charge inflation since January 2023.

Despite the current weakness, business confidence remained historically strong. Manufacturers cited expectations of improved demand and plans to expand product lines as reasons for optimism.

Attribution: Amwal Al Ghad English

Subediting: M. S. Salama