Russian Manufacturing Sector Expands Marginally In July

(RTTNews) - Russia's manufacturing activity expanded only at a softer rate in July, due to a sharp fall in output as firms struggled to hire and retain workers amid salary competition, survey data from S&P Global showed on Monday.

The S&P Global Russia Manufacturing Purchasing Managers' Index, or PMI, dropped to 50.3 in July from 50.9 in June. However, a reading above 50 indicates expansion in the sector.

Production fell for the sixth successive month and the latest decline was the quickest rate in three months. This was caused by raw material shortages and relatively subdued demand conditions.

At the same time, new orders rose at the sharpest pace since April 2019, linked to stronger domestic demand conditions than those seen in June. In contrast, new export orders registered a marked fall in July.

Manufacturing employment fell in July, though marginal overall. Companies cited salary competition as a reason for a decrease in workers.

On the price front, the current cost inflation was far slower than earlier in the year and was the second-softest since February 2020.

As a result, output prices fell for the second straight month in July and at the steepest pace since January 2009.

Business confidence among Russian manufacturers strengthened in July, with the level of optimism regarding the outlook for output over the coming 12 months improving to a five-month high.