MOSCOW (Reuters) - Activity in Russia’s manufacturing sector deteriorated in September to its lowest level in a decade, prompting companies to cut jobs as orders and client numbers dropped, a business survey showed on Tuesday.
The Markit Purchasing Managers’ Index (PMI) slid to 46.3 in September, its lowest reading since May 2009, from 49.1 in the previous month. It remained below the 50.0 mark that separates expansion from contraction for the fifth month in a row.
“The deterioration in operating conditions across the Russian manufacturing sector gathered pace in September ... following the sharpest contractions in output and new business for over a decade,” said Sian Jones, an economist at IHS Markit, which compiles the survey.
The drop in output was linked to a decline in new order volumes and the loss of clients, the monthly survey showed.
The picture painted by the PMI report fits into the broader economic situation in Russia where gross domestic product is on track to expand by just 1% this year, down from 2.3% in 2018.
The survey also showed that manufacturing sector companies cut jobs for the second month in a row in September, citing lower production requirements and redundancies.
“Weak domestic and foreign demand conditions also weighed on output expectations for the coming 12 months, as business confidence slipped to the lowest since December 2017,” Jones said.
Reporting by Andrey Ostroukh; Editing by Catherine Evans