PMI in Russian manufacturing falls to 50.8 in Dec from 51.3 in Nov - S&P Global

MOSCOW. Dec 27 (Interfax) - The Purchasing Managers' Index (PMI) for Russia's manufacturing sector fell to 50.8 points in December from 51.3 points in November, S&P Global research shows.

The latest data pointed to a slowdown of business activity in the sector toward the end of the year.

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

New orders increased in December, though at a slower pace. Export orders, which increased for the fifth month in a row, drove overall orders. Overall, weaker demand and some material shortages slowed the pace of production expansion in December. The pace of expansion was modest and historically subdued.

Cost pressures remained elevated in December. Cost increases were the second sharpest since October 2023. Companies reported higher material prices and unfavorable exchange rate movements.

The inflation rate of selling prices remained above the trend for the series, despite falling to a three-month low. Companies tried to pass on costs to customers, which explains the high selling prices.

Companies reduced their workforce in December. Production efficiency and relatively muted growth in new orders allowed them to work through their backlog of orders, reducing the need for additional staff. However, the decline in workforce was only marginal.

The employment cuts partly led to companies losing confidence in their production outlook over the next 12 months. While generally optimistic, companies expressed concerns about strengthening customer demand due to higher prices and shortages of inputs for production.

Raw material delivery times were extended in December owing to railway and logistics issues. Although delays were the least severe since June, respondents said longer delivery times were preventing them from building up inventories.