FX.co ★ Russia Manufacturing Activity Slips In To Contraction

Russia's manufacturing sector experienced its first contraction in twenty-nine months this September, triggered by declines in output, new orders, and employment, according to a report from S&P Global released on Tuesday.

The manufacturing Purchasing Managers' Index (PMI) fell to 49.5 in September, down from 52.1 in August. A PMI below 50 signals contraction, whereas a figure above 50 indicates expansion within the sector.

The decline in output was significant this month, attributed to both subdued demand and delays in supplier deliveries. This tepid customer demand also led to a reduction in new orders for the first time in twenty-eight months.

Despite this, new export orders experienced a robust increase, the strongest in over a year, fueled by heightened demand from Central Asia.

The survey also highlighted ongoing supply chain disruptions, including delays in rail transportation and international logistics, which severely impacted vendor performance.

In terms of pricing, input price inflation remained elevated in September due to raw material shortages and rising transportation costs. Consequently, selling prices surged at their fastest rate since October 2023.

Manufacturing employment saw a notable decrease, with the reduction pace being the sharpest in nearly a year.

Looking forward, confidence in the year-ahead outlook has fallen to its lowest point in nineteen months.