Russia’s manufacturing growth jumped in December, accelerating at the fastest pace since March 2008, as companies benefited from demand for exports and employers boosted hiring at the highest rate in more than four years.
The Purchasing Managers’ Index rose to 53.5 from 51.1 in November for the biggest monthly gain since September 2009, HSBC Holdings Plc said in a report today, citing data compiled by Markit Economics. The survey-based index indicates a contraction when it is below 50 and growth with a figure above 50.
The pickup in manufacturing is helping to lift the world’s biggest energy supplier from its 7.9 percent contraction last year. The economy grew 3.7 percent in the first 11 months and is set to reach the government’s target of 3.8 percent for the year, Economy Minister Elvira Nabiullina said last week.
“Manufacturers positively surprised in December, reporting improvements on all but one of the five key indicators,” Alexander Morozov, HSBC’s Moscow-based chief economist for Russia and the Commonwealth of Independent States, said in a statement. “Significant improvement in new orders, including new export orders, is particularly encouraging.”
Russian industrial production gained more than analysts estimated in November, rising an annual 6.7 percent, compared with 6.6 percent in the previous month.
“The pause in growth is over” and the economy will show “positive dynamics” in the fourth quarter, Deputy Economy Minister Andrei Klepach said on Dec. 15. Industrial output will expand 8.3 percent this year, rather than the previously forecast 7.6 percent, he said.
Employment in the manufacturing industry gained in December at the fastest pace since July 2006, according to HSBC. Export orders increased for the first time in six months, growing at the highest rate since March 2008, the index showed.
“The manufacturing sector faced stronger external and domestic demand and responded to it by increasing output and quantity of input purchases and decreasing inventories and backlogs of works,” Morozov said.
Still, input costs rose at the fastest clip since April 2008, prompting companies to raise wholesale prices and highlighting the risks facing the central bank as it tries to tame inflation without blunting the recovery.
Russia’s central bank raised the deposit rate by a quarter- point to 2.75 percent on Dec. 24 even as it left its key refinancing rate at 7.75 percent. Chairman Sergey Ignatiev said last week that monetary policy makers will focus next year on keeping inflation between 6 percent and 7 percent.
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