Russia's Manufacturing Growth Softens On Inflationary Pressures

(RTTNews) - Russia's factory sector expanded at a slower pace in June as the growth in new orders and output eased amid inflationary pressures, the purchasing managers' survey data from S&P Global showed on Monday.

The S&P Global Russia Manufacturing Purchasing Managers' Index, or PMI, dropped to 52.6 in June from 53.5 in May. However, a reading above 50 indicates expansion in the sector.

Output grew for the eleventh successive month in June, though at a slower pace. The upturn was attributed to greater new order inflows and new client wins.

The growth in new orders eased slightly from May. The overall rise was supported by sustained improvements in domestic demand and a renewed increase in new sales to external markets. 

On the price front, input prices continued to increase at a marked pace in June, linked to unfavorable exchange rate movements, material shortages, and supplier price hikes. Nonetheless, price pressures softened somewhat in May.

As a result, the rate of charge inflation was the quickest in a little over a year.

Russian manufacturers raised their staffing numbers for the eighth successive month in June, though the rate of job creation eased from the previous month's 22-month high.

Firms remained confident about output expectations in the next twelve months, underpinned by planned investment in new product ranges, hopes of stronger client demand, and expansion into new export markets.