2023.12.2906:44:00UTC+00Russian Manufacturing Activity Expands Most In Almost 7 Years

Russia's manufacturing activity grew at the quickest pace in nearly seven years in December amid sustained improvements in output and new order growth, the purchasing managers' survey data from S&P Global showed on Friday.

The S&P Global Russia Manufacturing Purchasing Managers' Index, or PMI, rose to 54.6 in December from 53.8 in November. A reading above 50 indicates expansion in the sector.

Output advanced at the sharpest pace since May on the back of strong customer demand and a sustained uptick in new order inflows.

The overall strong growth in new orders in December was attributed to expanding customer numbers, new product releases, and better-quality items on sale. As a result, companies increased their purchasing activity.

Meanwhile, news export orders fell for the second straight month and at the fastest pace since July.

Increased new orders encouraged businesses to hire more people, which resulted in the fastest job creation rate in three months, the survey said.

On the price front, input prices rose sharply in December, linked to higher supplier prices and unfavourable exchange rate movements. Nonetheless, the rate of inflation eased to a 6-month low. Similarly, charge inflation moderated due to competitive pressures.

The Russian service sector also remained in expansion territory in December, as new sales grew significantly amid stronger domestic and foreign client demand.

The Services Purchasing Managers' Index, or PMI, climbed to 56.2 in December from 52.2 in the previous month.

Private sector activity in Russia also expanded at the strongest rate in four months, with the composite PMI rising to 55.7 in December from 52.4 in November. The faster uptick stemmed from stronger growth at both manufacturers and service providers.