Russia’s manufacturing PMI in March hits record high

Russia’s manufacturing PMI in March hits record high
/ bne IntelliNews
By bne IntelliNews April 3, 2024

Russia’s manufacturing sector in March 2024 continued to see a sharp improvement in its health, according to latest PMI reports from S&P Global. (chart)

As followed by bne IntelliNews, despite the fallout from Russia's full-scale military invasion of Ukraine, the manufacturing sector ended 2022 with a historically strong expansion in output. Manufacturing PMI since January 2023 continued to trend in positive territory and posted the best performance in 13 years in the February 2024.

The seasonally adjusted S&P Global Russia Manufacturing Purchasing Managers’ Index (PMI) posted 55.7 in March, up from 54.7 in February and above the 50.0 no-change mark signalling expansion, showing “a steep improvement in operating conditions at Russian goods producers and one that accelerated for the second month running to the sharpest since August 2006,” according to the latest report.

Supporting the manufacturing sector was the rise in output and new orders, with the latter rising at the fastest pace in over 16 years.

S&P also notes that foreign client demand improved, as new export orders increased for the first time since October 2023. Manufacturers stated that stronger demand conditions, successful marketing campaigns and new client wins drove the expansion. 

Consequently, firms raised their production levels in March, with the output growing at the sharpest pace since January 2017, with companies commonly attributing the upturn to more robust demand conditions.

Increased production requirements pushed goods producers to increase employment at the end and secure full-time staff to build capacity. The rate of job creation in the sector accelerated to the steepest since November 2000, according to the report.

“Despite a further deterioration in vendor performance and transportation delays, firms recorded a slower pace of input cost inflation. The rate of increase eased to the second-weakest in a year and was below the series trend,” S&P wrote. The rate of increase in selling prices was the slowest since June 2023 and historically muted.

Russian goods producers in March also registered a pick-up in business confidence regarding the outlook for output over the coming year. The degree of optimism was the highest in five years, with firms also highlighting planned investment in new product lines and machinery.