Russian Manufacturing Activity Expands At Solid Pace

(RTTNews) - Russia's manufacturing activity expanded at an accelerated pace in August on the back of a robust rise in new orders despite facing inflationary pressures, the purchasing managers' survey data from S&P Global showed on Friday.

The S&P Global Russia Manufacturing Purchasing Managers' Index, or PMI, rose to 52.7 in August from 52.1 in July. A reading above 50 indicates expansion in the sector.

Further, the health of the sector has improved in each of the past 16 months, the survey said.

New orders grew at the sharpest pace in three months, which was more evident in foreign demand as the rate of growth in new orders was the steepest since March 2008.

Consequently, firms scaled up production levels further in August, albeit at a modest pace that was the softest in the current sequence of growth.

On the price front, input price inflation accelerated to a 17-month high in August amid the weakness of the Russian currency. In turn, the pace of output price inflation also quickened and was the fastest in 16 months.

Overall employment in the Russian manufacturing sector increased in August in line with rising demand, though the pace of job creation was the weakest in nine months.

Firms also increased their purchasing activity due to efforts to replenish stocks of purchases, which had fallen sharply in the previous survey period.

Despite the potential impact of currency weakness, firms continued to predict an increase in output over the coming year, often reflecting plans to expand production lines and improve efficiency.