Russian manufacturing strengthened for a fourth month in June as domestic demand helped fuel an increase in new orders, HSBC Holdings Plc said.
The HSBC Purchasing Manager’s Index increased to 51.7 in June from 50.4 in May, HSBC said today in an e-mailed statement, citing data compiled by London-based Markit Economics. The median estimate of three economists in a Bloomberg survey was for no change at 50.4. Readings above 50 indicate expansion.
Improving sentiment among manufacturers may signal a turnaround is near for industrial production, which shrank on an annual basis in May for the third time this year, as domestic customers help make up for weak demand from the European Union. The economy of the world’s largest energy exporter grew at the slowest pace since a 2009 contraction in the first quarter, sparking calls from President Vladimir Putin for measures to revive growth.
“Manufacturing growth gained stronger momentum in June,” Alexander Morozov, chief economist for Russia and the Commonwealth of Independent States at HSBC in Moscow, said in the statement. “The previous cautious manufacturers’ view on the sustainability of demand growth seems to have become more optimistic.”
The Micex Index (INDEXCF) of 50 stocks retreated 0.4 percent to 1,324.90 as of 12:07 p.m. in Moscow.The ruble weakened 0.1 percent to 32.8355 against the dollar.
OAO Russian Railways said shipments fell 2.8 percent in June from a year earlier. First-half cargo volumes are down 3.7 percent from a year earlier to 605.6 million tons, the Moscow-based railroad monopoly said in an e-mailed statement today.
Industrial production contracted 1.4 percent in May from a year earlier as manufacturing slid 4.4 percent, the sharpest fall since October 2009, according to Federal Statistics Service data compiled by Bloomberg.
Gross domestic product expanded 1.8 percent in the first five months from a year earlier, according to the Economy Ministry, which projects 2.4 percent growth this year and 3.7 percent in 2014. Expansion is set to exceed 3 percent in the second half, according to the ministry.
New orders grew at the fastest pace since February, driven by domestic orders, according to the HSBC statement. New export orders advanced “marginally” for a second month, HSBC said.
“Although export demand edged up again in June, the global economy is not in a great shape, posing downside risks for Russia,” Morozov wrote.
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