Amid Ukraine War, Russia’s manufacturing sector expands, inflation eases, jobs on 3-month high

Even as Russia is engaged in a full-fledged war against Ukraine for the past 19 months, its manufacturing activity grew at the quickest pace in nearly seven years this December, spurring job creation to a three-month high, according to the purchasing managers’ survey data from S&P Global. According to data, this improvement in the manufacturing sector comes owing mainly to increased output and new orders. Moreover, inflation eased to a six-month low. Russia’s Manufacturing Purchasing Managers’ Index, or PMI, rose to 54.6 in December— above 50 indicates expansion in the sector—from 53.8 in November. “The rate of growth was the strongest since January 2017,” according to Russia Manufacturing PMI research. The output has been driven by strong customer demand and a strong uptick in the inflow of new orders. The overall strong growth, therefore, in new orders in December is attributable to expanding customer numbers, release of new products and better-quality items on sale, according to a report from Reuters. Conversely, along expected lines, new export orders slid for the second straight month in December, dropping at the fastest pace since July this year. According to the survey, input costs increased sharply in December, driven up by higher supplier prices and unfavourable exchange rate. The Russian service sector too, according to the survey, expanded in December, driven by new sales along with stronger domestic and foreign demand.