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Russian manufacturing activity returns to growth in May


© Reuters. FILEPHOTO: Steam rises out of the heating power plant chimneys above Moscow’s skyline, Russia. November 23, 2020. REUTERS/Maxim Shemetov/File Photo

(Reuters] – Russian manufacturing activity grew in May, after three months’ contraction. However, price pressures have eased notably. But sanctions continue to depress client demand. A survey was released Wednesday.

The S&P Global (NYSE:) Purchasing Managers’ Index (PMI) rose to 50.8 from 48.2 in the previous month, climbing above the 50.0 mark that separates expansion from contraction for the first time since January.

Russia’s manufacturing industries are still being under pressure by sanctions that the West imposed on Russia in response to a “special military operations” in Ukraine. This operation was launched Feb. 24, 2018.

“Slower declines in output, new orders, employment and stocks of purchases all helped to boost the seasonally adjusted PMI,” S&P Global, which compiles the index, said.

Longer lead time, which ordinarily is a sign of improved demand conditions, but driven here by delays in logistics and sanctions, contributed to the index’s latest reading.

Despite the increase in the main PMI index, actual manufacturing output continued to fall in May, S&P Global said.

The decline in exports continues despite the fact that Russian companies have been cut off from the global economic system and are now facing significant disruption to their supply chain.

In May, companies further reduced their workforces. But confidence returned to its highest point since February. This was because firms expected economic stability and a higher level of domestic demand over the next few months.