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Russian manufacturing sector returned to growth in August -PMI

MOSCOW, Sept 1 (Reuters) - Russian manufacturing activity returned to growth in August after falling for 15 months in a row, helped by stronger production and a renewed rise in new orders, a survey showed on Tuesday.

IHS Markit’s Purchasing Managers’ Index (PMI) rose to 51.1 from 48.4 in the previous month, rising above the 50.0 mark that separates expansion from contraction for the first time since April 2019.

“The resumption of business at firms and their clients helped boost output as domestic demand strengthened,” said Sian Jones, an economist at IHS Markit, which compiles the survey.

“By contrast, foreign clients remained hesitant as the pandemic continued and global demand was subdued, with export sales shrinking further in August.”

Having plunged to a record low of 31.3 in April, the first month of pandemic-related lockdowns in Russia, the headline PMI has recovered steadily since then.

Employment in the sector fell again in August, extending the current sequence of job shedding to just over a year.

Business confidence among Russian manufacturing companies nevertheless remained strong, as firms counted on higher output over the next year.

Any recovery in the manufacturing sector could, however, “be drawn out as demand struggles to gain momentum”, Jones said. (Reporting by Andrey Ostroukh; Editing by Catherine Evans)

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