PMI in Russian manufacturing climbs to 50.6 in Oct from 49.5 in Sept - S&P Global

MOSCOW. Nov 1 (Interfax) - The Purchasing Managers' Index (PMI) for Russia's manufacturing sector rose to 50.6 points in October from 49.5 points in September, S&P Global research shows.

The operating environment in the sector improved somewhat compared to the previous month, the latest data showed.

Index readings above 50.0 points indicate growth in business activity, while those below 50.0 indicate a decline.

Production volumes continued declining for the second consecutive month in October, with respondents reporting muted customer demand, as well as new orders declining, though the rate of the downturn in output and new orders was slowing.

New export orders rose for the third consecutive month versus the overall decline in sales, with the growth rate indeed accelerating the fastest since January 2008 owing to increased demand from customers in neighboring countries.

Business costs in October rose amid high shipping and railway costs, increased supplier prices, and unfavorable fluctuations in the exchange rate. Cost inflation was the highest in three months.

Companies attempted to pass on the rise in costs to customers through a faster increase in selling prices. The rate of inflation of selling prices was the highest in a year.

Companies increased the number of employees in October in hopes that demand rises in the coming months. Growth in sector employment, albeit modest, contrasted with the decline in September.

However, capacity remained noticeably under pressure owing to the ongoing high level of unfulfilled work.

The rise in the number of employees also occurred amid improved expectations for the sector's output over the next 12 months. Confidence in the manufacturing outlook was the highest in three months on the back of planned investment in automation and new product development.