Business activity in the industry of Russia returned to growth

The purchasing managers ‘ index (PMI) in the manufacturing sectors of Russia by the end of August 2016 rose to 50.8 points, according to a press release from Markit.

The head index has exceeded the critical level of 50 points for only the second time since the beginning of 2016, said Markit economist Samuel Agassi. The previous time was recorded in June, when the index for the first time from November 2015 exceeded 50 points to 51.5 points, which was the best result in 19 months. But in July, fell to 49.5 points.

When calculating the index takes into account the number of new orders of enterprises, production, employment and stocks of raw materials, as well as the timing of their delivery. If the index grows above 50, it indicates growth, below — its decline.

Experts Markit noted that the current increase in the price index contributed to the growth in the volume of industrial production grows for the fourth consecutive month), as well as a moderate increase in new orders.

“New business growth is good news for manufacturers after a period of uncertain demand for 2016. The company does not lose hope that a sustained sequence of expanding new orders will be maintained in the coming months,” said Markit economist Samuel Agassi.

At the same time, some key indicators continue to point to the difficult situation in the industry. Industrial plants for 28 consecutive months, the continuing decline in the volume of stocks of finished products, the average delivery time of raw materials increased again (August was the 31st month of increase) and the number of jobs in industry has fallen again. Reduced the number of pending orders that became 41-m reduction over the last 42 months.

“The reduction in manufacturers as the number of personnel and level of inventories of finished products, as well as a further drop in outstanding work, can result in the production volumes to the loss of thrust if difficulties in these areas will not be overcome”, said Agassi.

Previously, experts of the Higher school of Economics in their study, said that Russia’s economy is “stuck at the bottom”, while industry has not yet seen “clear signal” about improving the situation.