The decline in manufacturing industry in Russia reached a maximum of 7 years

The purchasing managers ‘ index (PMI) in the manufacturing industry of Russia in April 2016 fell to 48 points versus 48.3 points in March, according to Markit. The decline in activity in the Russian industry continues five months in a row, and the current index value is the smallest for eight months.

“PMI data for April brought further disappointing news for politicians. Head figure has reinforced the forecasts made by the International monetary Fund [downgraded the forecast decline of Russia’s GDP in 2016 to -1.8% -], falling to eight-month low, and putting to the more complex conditions in the Russian manufacturing sector,” said Markit economist Samuel Agassi.

In April 2016 the volume of output in the manufacturing sector fell at the fastest rate since may 2009 against the background of reducing the volume of new and pending orders. According to experts at Markit, the drop in the volume of outstanding business continued for two years in a row, and therefore in the industry, the continuing decline of employment.

“Concerned that the fall in consumption of Russian goods allows producers to complete a previously received orders, thereby freeing up production capacity, which leads to further job losses,” said Agassi.

At the same time, output prices for products of Russian industrial enterprises continue to rise, driven by higher prices for raw materials. Stocks last at the enterprises again declined.

The PMI is based on a survey of managers of leading companies, their assessment of the current situation in the economy and prospects of business development. If the index grows above 50, it indicates growth, below — its decline.

Earlier, Markit reported that business activity in the Russian services sector in March 2016 has shown a record for the 10 months of growth.