Bloomberg News

Russian Manufacturing Shrinks First Time in 19 Months

August 01, 2011

(Corrects to show contraction from first paragraph.)

Aug. 1 (Bloomberg) -- Russian manufacturing contracted in July for the first time since December 2009 as slowing growth in China and the euro area damped demand for the country’s exports.

The Purchasing Managers’ Index fell to a seasonally adjusted 49.8 from 50.6 in June, HSBC Holdings Plc said in a report today, citing data compiled by London-based Markit Economics. A reading below 50 indicates contraction.

Russia, the world’s biggest energy exporter, is lagging behind growth in emerging-market peers Brazil, India and China. Gross domestic product expanded 3.7 percent from a year earlier in the second quarter, less than the 4.1 percent rise in the first three months of 2011, according to the Economy Ministry.

“The Russian manufacturing sector appeared to enter the summer recess in July,” Alexander Morozov, HSBC’s chief economist for Russia and the Commonwealth of Independent States, said in the report. The weak reading “clearly demonstrates the strong dependence of Russian manufacturing growth on the global economic cycle through Russian exports.”

--Editor: Brad Cook.

To contact the reporter on this story: Yuliya Fedorinova in Moscow at yfedorinova@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net


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