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Russia's manufacturing sector contracts further in March

Staff writer ▼ | April 2, 2016
The contraction in Russia's manufacturing sector intensified in March as companies continued to cut jobs, a Markit survey of purchasing managers showed.
Russia's manufacturing
State of industry   Russian factories are in the midst of a worsening downturn
The headline Purchasing Managers' Index for the manufacturing sector declined to 48.3 in March from 49.3 in February, remaining below the 50 level that separates growth from contraction for the fourth month in a row.

"Russian factories are currently in the midst of a worsening downturn," Samuel Agass, an economist at Markit, said in the PMI report.

The monthly report contrasts with optimistic statements recently made by top officials. Economy Minister Alexei Ulyukayev said the economy will return to growth in the short term, but the PMI data suggest the contraction in the manufacturing sector could persist.

The survey showed that output and new order volumes contracted in March, which companies blamed on higher output prices.

At the same time, the manufacturing sector cut employee numbers at the fastest pace in 14 months.

"If the current sluggish market environment continues over the next few months, firms will be looking to the Bank of Russia to provide some stimulus in order to revive the underperforming economy," Mr. Agass said.

The central bank has been reluctant to ease monetary policy so far, citing high inflationary risks.