Russian factory sector sees slight improvement in April, PMI shows

MOSCOW (Reuters) - The Russian manufacturing sector saw a slight easing in its downturn in April, with contractions in both output and new orders slowing to a marginal pace, S&P Global reported on Monday.

The Purchasing Managers' Index (PMI) for Russia's manufacturing sector rose to 49.3 last month from 48.2 in March, marking a second consecutive monthly decline but at a slower rate. A PMI reading below 50.0 signals contraction, while above 50.0 indicates growth.

The report highlighted a renewed drop in employment, ending a three-month streak of net job creation, with firms opting not to replace voluntary leavers as production requirements dipped.

Despite this, confidence among manufacturers remained elevated, driven by hopes for stronger demand and plans to expand product ranges.

Input costs rose at the weakest pace since February 2020, aided by favourable exchange rate movements against the dollar, which helped moderate price hikes for imported goods.

That contributed to a more muted rise in selling prices, marking the slowest rate of output charge inflation since January 2023.

Russian manufacturers increased purchasing activity slightly in April, aiming to rebuild safety stocks amid stabilising supplier delivery times.

However, subdued client demand continued to weigh on new orders, both domestically and abroad, with competition and reduced purchasing power cited as key challenges.

(Reporting by Reuters; Editing by Hugh Lawson)

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