Russia’s manufacturing sector grows further in January 2017, PMI reaches 70-month high

Russia’s manufacturing sector recorded further gains at the beginning of 2017. The seasonally adjusted Markit Russia Manufacturing PMI reached a 70-month high of 54.7 in January 2017, a rise from 53.7 in December. This figure indicates towards a robust rebound in the health of the country’s manufacturing sector and extended the current sequence of growth to six months, noted Markit.

Robust demand for Russia’s manufactured goods was seen in the sharpest uptick in new work for nearly six years. The pace of growth exceeded the historical average and was significant. On the contrary, companies registered a decline in their new export business, extending the current downturn to nearly three-and-a-half years.

Goods producers operating in Russia recorded an additional build-up of backlogs of work after being faced with higher new orders. Furthermore, the pace of accumulation was the most rapid in nearly ten-and-a-half years. Increased workloads encouraged manufacturers to hire more for a second consecutive month and at the most rapid pace since March 2011.

In the meantime, Russia’s goods producers increased their production at a significant rate in January. The pace of growth accelerated to a 70-month high, with panellists stating stronger underlying demand in the sector. But finished goods stocks fell further, as companies used postproduction inventories to satisfy the increase in new orders, stated Markit.

Manufacturers in Russia increased their purchasing activity further in January. The pace of rise was the most rapid since March 2011. But the volumes of input stock fell for another month, but the pace of decreases was weaker than the series average.

Meanwhile, Russia’s business sentiment towards output growth in the coming 12 months stayed robust at the beginning of 2017, with the level of positive confidence rising to a five-month high.