MOSCOW (Reuters) – Russian manufacturing activity shrank for the fifth straight month in April, but at a slower pace than in March, a survey showed on Tuesday.
The HSBC purchasing managers’ index (PMI) rose to 48.9 from 48.1 in March but remained below the 50 mark. A reading above 50 signals growth in activity.
The index continued to be weighed down by declines in new orders and employment, though output expanded slightly. The pace of input and output inflation slowed sharply.
Purchasing activity fell marginally as companies continued to reduce stocks at a time when working capital remained tight.
“The rapid deceleration in price inflation coupled with a strengthening of the rouble offers hope that the manufacturing sector is getting back to a firmer footing,” said Paul Smith, senior economist at Markit.
He cautioned, however, that a full recovery remained some way off given that survey data pointed to the sharpest monthly fall in new orders in almost six years.
Russia’s economy is heading for recession in 2015 as sharply lower oil prices depress the country’s export revenues and Western sanctions over the Ukraine crisis restrict large companies’ access to international capital.
But a recent rally in the rouble as the oil price has partially recovered, together with signs that inflation has peaked and relatively resilient industrial output in recent months, indicate the economy may hold up better than some economists had predicted.
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(Reporting by Alexander Winning; Editing by Susan Fenton)