2019.11.0109:20:00UTC+00Russia Manufacturing Shrinks At Slower Pace

Russia's manufacturing deteriorated for the sixth successive month in October, but at a slower pace, due to weaker client demand, survey data from IHS Markit showed on Friday.

The purchasing managers' index, or PMI, for the manufacturing sector rose to 47.2 in October from 46.3 in September. Any reading below 50 indicates a contraction in the sector.

The pace of the overall contraction was the second-strongest since May 2009, IHS Markit said.

Production decreased further in October and remained sharp despite some slowing in the pace. The fall in output was due to lower client demand and a sustained drop in new business.

Factory sales fell for the fifth straight month in October as customers hesitated to place new orders and new export orders declined at the sharpest pace for over a decade.

The number of employees decreased for the third month in a row due to a sustained fall in new business and a steep reduction in backlogs of work.

Input prices rose in October, and supplier and energy costs were higher, remaining below those seen at the start of the year.

Firms decreased their purchasing activity as they supplemented production through the use of pre-production inventories. Stocks of finished goods fell as client demand weakened and due to efforts to run down stores.

However, manufacturers remained strongly optimistic about the 12-month outlook in the backdrop of new product developments and planned investment in new machinery.

"Muted growth across the sector at the beginning of the fourth quarter reflected our current forecast for a 0.6% quarter-on-quarter contraction in industrial production during the final three months of 2019," Sian Jones, economist at IHS Markit, said.