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. Last Updated: 07/27/2016

PMI Rises 4th Month This Year

The rate of decline in Russia's manufacturing sector slowed for a fourth straight month in April, as the number of new orders fell less steeply, VTB Capital said Monday.

The bank's Purchasing Managers' Index, derived from a monthly survey of 300 executives in Russian manufacturing companies, rose to 43.4, the highest level in six months, from 42 in March. A reading below 50 indicates contraction.

"The results are no doubt positive," said Dmitry Fedotkin, an economist at the investment bank, adding that they did not necessarily mean that the economy was on the road to recovery.

The results were in line with the predictions of 16 analysts polled by Reuters last week. They said the worst of the slowdown had passed but expected a larger median contraction of 4.7 percent of gross domestic product this year.

Deputy Economic Development Minister Andrei Klepach said last month that the economy could shrink as much as 6 percent in 2009. His boss, Minister Elvira Nabiullina, said later last month that a recent increase in electricity consumption and rail cargo shipments were encouraging signs that the economy could be rebounding.

The survey's latest findings provided further evidence that the manufacturing sector was going through a longer and larger contraction than the one caused by the financial crisis in 1998, the bank said. The current downturn extended to nine months in April, compared with seven months in the previous decline.

In addition to a weaker fall in new orders, the rate of contraction in new business has moderated since hitting a record in December, VTB Capital said. New export business, however, declined more quickly than in March. Output declined at a rate that was little changed from the previous month.

Employment among manufacturers continued to weaken, although the drop eased for the third month running, the bank said. Unemployment reached 10 percent of the work force, or 7.5 million people, in March.