MOSCOW (Reuters) – Russia’s manufacturing sector expanded at its fastest pace in almost six years in November thanks to an increase in output and new orders, a business survey showed on Thursday, rebounding from a dip towards contraction last month.
The S&P Global (NYSE:) Purchasing Managers’ Index (PMI) rose in November to 53.2 from 50.7 in October, moving well clear of the 50 mark that separates expansion from contraction and reaching its highest since January 2017.
“Demand continued to be driven by domestic customers as new export orders contracted sharply again,” S&P Global said. “Nonetheless, greater new sales spurred renewed increases in employment and inventories, with input buying expanding at a steep rate.”
S&P Global said sanctions against Moscow, imposed over its actions in Ukraine, continued to weigh on foreign client demand, with new export orders contracting at a sharp pace for the 10th month running.
Expansion lost momentum in October after President Vladimir Putin announced a “partial mobilisation” in late September that saw some 300,000 reservists – mostly young, working men – drafted for the military operation in Ukraine.
But the manufacturing sector has shown resilience.
“Despite a further sharp extension to supplier delivery times amid logistics challenges and disruptions, firms expanded their input buying at the fastest pace since January 2017,” S&P Global said.
Meanwhile business confidence, supported by hopes for new orders, surged to its second-highest since April 2019.