MOSCOW, (Reuters) – Russian manufacturing activity grew in January because of new orders and stronger demands that prompted companies t to increase their hiring. A survey was released Tuesday.

The February Markit PMI rose from 51.6 to 51.8. In January, it was above 50.0 which separates contraction from expansion.

Sian Jones (a senior economist at IHS Markit who compiles this survey) stated that Russian manufacturing companies signaled an encouraging start for 2022, as domestic demand conditions improved.

Businesses linked increased sales to better business performance and more consumer spending.

According to the Monthly Survey, this was the fastest pace for job creation since November 2018, as optimism rose to its highest level since April.

However, inflation increased further. Inflation reached an all-time high of five months for output charge inflation. However, it was six months that input price inflation (or cost inflation) hit its peak.

Jones stated that “headwinds from rising costs don’t look like they will dissipate in near-term,” and added that pressure on margins was expected to continue across Russia’s manufacturing sector by 2022.

In order to control stubbornly high inflation, the Russian central bank will likely raise rates even more in February.