PMI in Russian manufacturing falls below critical threshold to 49.5 in Sept - S&P Global

MOSCOW. Oct 1 (Interfax) - The Purchasing Managers' Index (PMI) for Russia's manufacturing sector fell to 49.5 points in September from 52.1 points in August, S&P Global research shows.

This is the first time the index has fallen below the critical threshold of 50 since April 2022.

Index readings above 50.0 points indicate growth in business activity, while those of less than 50.0 show a decline.

The decrease in production, the first since July 2022, was linked to subdued demand conditions and supplier delivery delays, S&P Global said.

New orders decreased at the end of the third quarter, ending a 27-month sequence of growth. Russian manufacturers still recorded the fastest increase in new export orders since August 2023 which respondents said was caused by stronger demand from Central Asia.

Supply chain issues, including delays to rail transportation and international logistics, led to a sharp deterioration in vendor performance in September. The extent to which lead times lengthened was the second biggest since July 2022.

Russian goods producers reported a faster rise in input costs during September amid raw material shortages and greater transportation fees, which they sought to pass through to customers as output prices rose at the fastest rate since last October. The pace of inflation was historically elevated.

In line with lower new order inflows, Russian goods producers reduced workforce numbers at the end of the third quarter. Jobs were shed at the fastest pace since October 2022. Even so, backlogs of work declined for the third time in four months during September. The rate of depletion was solid and the steepest since February as firms were able to process backlogged orders effectively.

Businesses remained confident output would expand over the coming year in amid planned investment in new product ranges, but the degree of optimism fell to the lowest since February 2023.