Russian manufacturing sector improves further in November -PMI

FILE PHOTO: Steam rises from chimneys of a heating power plan over the skyline of central Moscow, Russia November 23, 2020. REUTERS/Maxim Shemetov/File Photo

MOSCOW (Reuters) - Russian manufacturing activity expanded marginally in November as new orders growth accelerated but cost pressures strengthened, a survey showed on Wednesday.

The IHS Markit Purchasing Managers’ Index (PMI) rose to 51.7 from 51.6 in October, staying above the 50.0 mark that separates expansion from contraction for the second month in a row.

Growth in output and new orders accelerated to the fastest pace since May as client demand strengthened.

“Although the upturns were historically subdued, they were the fastest for six months,” said Sian Jones, an economist at survey compiler IHS Markit.

Employment increased for the second month running in November, with the pace of job creation at its fastest since December 2018 thanks to higher production requirements.

Input costs rose markedly due to increased supplier costs and raw materials shortages. Firms said they had partially passed them on to clients.

The level of optimism among producers reached a five-month high as they hoped for an uptick in customer orders.

“Upbeat expectations came despite a recent surge in COVID-19 cases which could threaten the speed of recovery in demand conditions across the sector,” Jones said.

Reporting by Anna Rzhevkina; Editing by Andrey Ostroukh and Catherine Evans