Processing complained about being busy – Newspaper Kommersant No. 204 (7405) dated 11/02/2022

According to an October study by S&P Global on the state of Russian processing, over the past month, the pace of output expansion and new orders in the sector has decreased to the lowest since July, incoming costs have grown at the fastest pace since May, and the decline in staffing due to mobilization “was significant” and the fastest. from April 2022. “A number of firms suggested that the reduction in staffing was due to a shortage of labor,” – said in a report by S&P Global. As a result, the PMI index of the manufacturing industries of the Russian Federation in October amounted to 50.7 points, having fallen from 52 points in September (a value of the indicator above 50 points indicates an increase, below – a decrease in business activity; see chart).

At the same time, production in October, although slightly, grew for the third month in a row in the face of a weakening influx of new orders and customer demand. Although respondent companies noted that import substitution efforts have stimulated demand, the pace of expansion was the slowest in four months. New export orders, on the other hand, reduced the dynamics of sales, as demand from foreign customers fell sharply. At the same time, as the authors of the study note, respondents often associated the decline in demand for foreign customers with the effect of sanctions. However, companies’ expectations regarding the prospects for production in the coming year remained positive – the level of manufacturer confidence was the second highest level after September since April 2019 on the back of expectations of increased demand and investment in product development.

The maximum cost inflation since May in the company’s sector was associated with an increase in the cost of logistics services, transportation, imported goods and components. However, despite this, the selling prices in October remained virtually unchanged. Some companies reported that trying to pass on high costs to customers pushed prices up, while others reported that sales promotions drove down selling prices.

Against this backdrop, work in progress continued to decline at its fastest pace since June 2021, while delivery times for raw materials increased to the longest since July 2022 amid problems with logistics, while companies increased their purchases in October. Buying activity of companies grew at the fastest pace since August 2017.

Artem Chugunov