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. Last Updated: 07/27/2016

Manufacturing Sector Posts Healthy Growth

Manufacturing continued an upturn in March, led by a growth in new orders and stronger output, suggesting the economy was on track to again expand over 4 percent this year, Moscow Narodny Bank said Tuesday.

The Manufacturing Purchasing Managers' Index, based on a poll of 300 purchasing managers, rose to a seasonally adjusted 51.3 in March, its highest level in five months.

The index is designed to give a snapshot of manufacturing conditions. A reading above 50, which is considered a no-change mark, indicates a rise on the previous month.

The index firmed marginally to 50.3 in February from 49.1 in January when the manufacturing sector's growth faltered for the first time in more than four years.

"While this is largely derived from robust global energy prices, at 51.3, the current level is indicative of annual real GDP growth again in excess of 4 percent," Paul Forrest, a group economist at MNB, said in a statement.

Russia, the world's second largest crude exporter, had been aiming for 3.5 percent to 4.4 percent growth in 2003 depending on global crude prices but after a strong start officials raised their forecast to 4.5 percent for the year. Russia's economy rose 4.3 percent in 2002.

The bank attributed the rise in March PMI to new order book growth that rose at its fastest pace for seven months, buoyed by improved domestic conditions. New export orders were also reported to have risen at a faster rate than in February.

As order levels accelerated for a second straight month, firms responded by increasing production at their plants in March.

"A number of panelists added that, apart from the rise in new order levels, new product developments had also contributed to the upturn in output growth," the bank said.

The bank said that input price inflation accelerated for a third straight month in March to the fastest since October 2000, fuelled by rising utility and energy prices as well as increasing costs of imports from the eurozone.

The survey also unveiled further manufacturing job losses in March with the workforce contracting for the seventh consecutive month.