PMI in Russian manufacturing declines to 53.6 in July from 54.9 in June - S&P Global

MOSCOW. Aug 1 (Interfax) - The Purchasing Managers' Index (PMI) for Russia's manufacturing sector declined to 53.6 points in July from 54.9 in June, S&P Global research materials indicate.

The latest data show that the sector's growth rate was the weakest in six months amid a slowdown in new orders and output.

Index readings above 50.0 points indicate growth in business activity, while those below 50.0 indicate a decline.

Companies in the sector continued to record a steady influx of new orders in July amid improving conditions for demand and the attraction of new customers, with the current growth sequence observed since June 2022. However, a renewed downturn in new export orders contributed negatively to the overall volume of new sales, with the rate of decline the strongest since April, though modest overall. Respondents attributed the downturn to weakening demand from key export markets, resulting in companies slowing the pace of growth in production in July.

Company costs rose substantially last month, with cost inflation at its highest since October 2023. Respondents reported higher costs for raw materials, transportation, and suppliers, as well as unfavorable movements in the exchange rate that drove up prices for imported goods.

Companies continued to pass on increased costs to customers through higher selling prices. The rate of inflation in selling prices slowed from June, though remained faster than the historical average.

Companies increased purchasing activity in July despite the longer lead times for delivery and higher costs. Several respondents attributed the increased purchasing activity to uncertainties regarding supplies of new materials. Nevertheless, the pace of growth was the slowest since February.

Companies remained optimistic about the sector's manufacturing outlook over the next 12 months, with investment in new equipment, product development, and hopes for more solid demand conditions driving respondent business confidence. Optimism has changed little from the three-month high in June.