Russia's December HSBC manufacturing PMI hit no-change mark of 50 from 52.2 in November following 14 straight months of positive readings, as new export business fell for third time in five months
December 27, 2012
– Russia’s manufacturers ended 2012 on a weak note, according to December HSBC PMI® data compiled by Markit. New orders rose at a weaker rate, partly reflecting a drop in new export business. This lead to a near-stagnation in output growth, and firms cut workforces at the fastest rate in over three years.
The survey’s headline figure is the HSBC Purchasing Managers’ Index™ (PMI) – a composite indicator designed to give a single-figure snapshot of operating conditions in the manufacturing economy. Readings above 50.0 indicate an overall improvement in business conditions, below 50.0 an overall deterioration. The PMI equalled the no-change mark of 50.0 in
December, ending a 14-month period of positive readings. The fall in the PMI from November’s 52.2 was among the steepest registered in the past four years, and took the average for the final quarter of 2012 below those for both Q2 and Q3. The downward movement in the index was primarily influenced by its three main components – new orders, output and employment.
New orders received by Russian manufacturers rose for the fifteenth successive month in December. That said, the rate of expansion slowed further from October’s 19- month high, to a four-month low. It was also weak in the context of historic survey data. Moreover, new export business declined for the third time in five months, and at the fastest rate since October 2010.
The weakening trend in new order growth resulted in a near-stagnation in output in December. Production rose at a marginal rate that was the slowest since September 2011. Output rose slightly in the consumer goods sector, was broadly flat in the intermediate goods sector and fell marginally in the investment goods sector. Russian manufacturers reduced headcounts for the second month running in December, the first back-to-back fall in employment in the sector for over a year. Moreover, the rate of job shedding was the fastest since August 2009. Goods producers also cut input stocks at the fastest rate since November 2010, as they raised purchasing of new inputs at only a marginal pace. Cost pressures remained subdued in the context of historic survey data in December. The rate of input price inflation was little-changed from November’s five-month low, with firms generally linking any increases to rising labour costs. Similarly, pricing power remained muted, with output prices rising at a modest rate that was unchanged from November.
HSBC Russia Manufacturing PMI®, December 2012