The Russian manufacturing sector demonstrated weak growth in July after a steep decline in June, according to the latest HSBC Purchasing Managers’ Index data published in the Markit Economics business survey on Wednesday.
“The PMI improved from 51.0 in June to 52.0, above the average for the current growth sequence but weaker than the trend for Q2 (52.3),” Markit said in a statement.
HSBC’s PMI is a composite indicator designed to give a single-figure snapshot of operating conditions in the manufacturing economy. An Index above 50 points indicates growth, while below 50 points shows a decline in business activity in the sector.
“The PMI remained above 50.0 for the tenth month running in July, signaling an overall improvement in business conditions,” the survey said.
In June, Russia’s manufacturing PMI fell from 53.2 to 51 points, the steepest month-on-month decline in the past three and a half years.
“It follows from the survey that Russian manufacturing appears to be capable of sustaining low, yet positive growth, with a reliance on primarily domestic sources,” HSBC Chief Economist for Russia and CIS Alexander Morozov said.
“However, the likely moderation of private consumption growth on the back of faster inflation and lower oil prices could push manufacturing growth further down in the coming months. Manufacturers prepare for hard times in advance, and the fastest rate of inventory reduction since October 2009 signals that they are already adjusting output levels to a potential weakening of demand.”