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Bloomberg: higher domestic demand boosts Russian manufacturing

Growth in output and new orders helped moderate a downturn in Russia’s manufacturing.

While ruble depreciation drove up input costs at the strongest pace since February 2015, the The Purchasing Managers survey found that some manufacturers are benefiting from greater demand from local clients for goods produced in Russia. Index PMI rose to 49.1 in September from 47.9 in August, according to a statement released Thursday by Markit Economics. That was better than every forecast in a Bloomberg survey of four analysts, whose median estimate was for 48.3. The gauge has been below the 50 threshold that separates contraction from growth. Russia Manufacturing Purchasing Managers’ Index measures the performance of the manufacturing sector and is derived from a survey of 300 manufacturing companies. The manufacturing sector accounts for about 15% of Russia’s GDP (gross domestic product).

However, mid-term, the economic data doesn’t give much reason for optimism. Between a downturn of industrial production, a decline in oil prices and a contraction in the economy, there are no drivers of economic growth. Bloomberg stated that the case is that Russian manufacturing slump eased more than forecast last month