VTB PMI underlines Russian manufacturing pickup

VTB Capital’s Russian manufacturing Purchasing Managers Index for April is showing further signs of a manufacturing rebound picking up traction.

Last month the PMI rose to 52.1 from 50.2 for March which, the report notes, is the highest since May 2008.

VTB Capital economist, Dmitry Fedotkin said that four of the five PMI components strengthened during April with employment at last showing signs of improving.

“The headline number was supported by improvements in the output (53.9), new orders (52.6) and new export orders (53.0) sub-indices. Most encouragingly, however, the employment index rose to 51.2, pointing to the first monthly rise in employment since March 2008.”

The report showed new orders encouraged a production increase, which saw manufacturing post its biggest jump since September last year. However, Fedotkin added that rising prices are a concern, with manufacturers, so far, mainly able to avoid taking on the extra costs.

“At the same time, concerns were raised by the significant intensification in price pressures, with the input prices index rising to 67.0 and output prices index rising to 57.1, the highest since August 2008. Producers were able to pass the rising prices in metals, energy, oil products and shipping charges on to end-customers.”