World News

Russian manufacturing activity shrinks for ninth month in January: PMI

MOSCOW (Reuters) – Russian manufacturing activity fell in January for the ninth month running but the pace of contraction slowed and business confidence increased on hopes for stronger client demand, the Markit purchasing managers’ index (PMI) showed on Monday.

The index’s headline reading rose to 47.9 in January from 47.5 in the previous month, remaining below the 50.0 mark that separates expansion from contraction since May.

“Russian manufacturers started 2020 on a low note as production and new business continued to decline,” said Sian Jones, an economist at IHS Markit, which compiles the survey.

“That said, paces of contraction eased for the second month running, with firms signaling slow and tentative moves toward a potential recovery in operating conditions.”

The pace of contraction in output, new business and employment in January was slower than in the preceding month but activity in the manufacturing sector remained under pressure from sluggish client demand.

January also signaled a stronger degree of confidence about the output outlook, with optimism of polled companies at a five-month high as firms hoped for a recovery in client demand, IHS Markit said in its monthly report.

“Our current forecast for industrial production growth in the opening three months of 2020 is just under 2% compared to the same period a year ago, with the expansion set to gradually quicken as the year progresses,” Jones said.

(Reporting by Andrey Ostroukh; Editing by Toby Chopra)