Russia Manufacturing Downturn Eases In January

(RTTNews) - Russia's factory activity deteriorated at the slowest pace in eight months amid weaker contractions in output and new orders, survey results from S&P Global showed on Monday.

The manufacturing purchasing managers' index, or PMI, rose to 49.4 in January from 48.1 in December and moved close to stabilization. However, any reading below 50 indicates contraction.

Among components, new orders continued to fall amid weak demand conditions, though the rate of contraction was the weakest in eight months. New export orders also decreased slightly in January. Production levels increased at the slowest pace in the current 11-month sequence of decline.

On the price front, input price inflation accelerated to a 1-year high, linked to higher costs due to the recent hike in VAT. As a result, selling price inflation rose to the fastest since October 2023.

Russian manufacturers continued to reduce workforce numbers in order to cut costs, and they also scaled back input buying during the start of the year. The survey revealed that supply chains were disrupted to the greatest extent in almost a year amid logistics challenges with imported items.

Looking ahead, manufacturers expressed positive output expectations over the next twelve months. Nonetheless, concerns regarding demand conditions remained, although they hope new product releases will boost new orders.