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. Last Updated: 07/27/2016

No PMI Growth in January

The manufacturing economy showed virtually no growth in January, although the trend was consistent with economic expansion this year of 4 percent, Moscow Narodny Bank said in a survey published Friday.

The bank said in a report that its Purchasing Managers Index, compiled from the responses of 300 Russian manufacturers, showed a level of 50.1 in January after 52.1 in December.

A reading below 50 indicates contraction.

"Although continuing to signal marginal overall expansion, the rate of growth signaled by the PMI was the weakest for over three years," it said.

But Moscow Narodny Bank group economist Paul Forrest said in a statement that the economy was still set for growth in 2002.

"While the PMI data for January, 50.1 on a seasonally adjusted basis, gives cause for concern, trend profiles for the previous three years indicate that this month's PMI remains consistent with a real GDP growth rate in the region of four percent in 2002," he said.

The survey's findings are in tune with figures from the State Statistics Committee over the last few months, which have shown that the country's economic expansion was running out of steam.

Moscow Narodny said the latest drop in the PMI, after the fall in December to 52.1 from 52.9, was due to weaker positive contributions from both output and new orders, along with the first drop in manufacturing employment since February 1999.

It said that the growth in new orders at 50.7 was the weakest since November 1998.

"In contrast to the situation throughout much of 2001, when strong demand from the domestic economy drove overall growth, January's survey suggested that expansion of orders had been sustained by a modest pick up in foreign sales," it said.

It said the output index had dropped to 50.7 in January from 53.8 in December.

The new export orders index rose to 51.3 from 49.8, due to contracts for new products being secured.