Russian Manufacturing Gauge Drops to 8-Month Low as Demand Ebbsby
Markit index declines to 48, worse than economists predicted
Production contracted at sharpest pace since May 2009
A gauge tracking Russia’s manufacturing industry declined to the lowest level in eight months, missing economist forecasts as demand deteriorated further amid the longest recession in two decades.
The Purchasing Manager’s Index fell to 48 in April from 48.3 in March, remaining below the threshold of 50 that separates contraction from growth for a fifth month, Markit Economics said Friday in a statement. The median of six estimates in a Bloomberg survey was for an advance to 48.9.
“Behind April’s downturn was a further contraction in production, the sharpest since May 2009,” Markit economist Samuel Agass said. The data indicate “more challenging business conditions for Russian manufacturers.”
Buffeted by low oil prices and sanctions over Ukraine, the economy of the world’s largest energy exporter contracted 1.4 percent in the first quarter, while the ruble has slumped more than 20 percent in the past year. As inflation pressures take precedence, the central bank has kept its benchmark interest rate at 11 percent since July 2015.
Producers shed employees for a thirty-fourth straight month in April, according to Markit. Companies raised factory-gate prices for a ninth month as input costs rose, it said.