Russian June factory activity shrinks for first time in 2021 -PMI
MOSCOW, July 1 (Reuters) - Russian manufacturing activity shrank in June, the first monthly decline in 2021, hit by weaker client demand and a fall in employment, a business survey showed on Thursday.
IHS Markit's Purchasing Managers' Index (PMI) for the sector fell to 49.2 in June from 51.9 the previous month, dropping below the 50 mark that separates expansion from contraction for the first time since December.
"Exacerbating the challenges facing the sector were further supplier delays and hikes in input costs," said Sian Jones, an economist at IHS Markit, which compiles the survey.
Firms cut workforce numbers in June, the first round of job-shedding this year, due to lower production requirements and sufficient capacity to process backlogs.
Input prices increase in the sector was among the sharpest on record. Selling prices also rose, with companies in the survey saying they passed cost burdens on to clients where possible.
Meanwhile, transportation issues and raw material shortages contributed to delays in suppliers' delivery times.
"Nonetheless, firms' output expectations remained upbeat amid hopes that demand conditions will tick higher in the year ahead," said Jones. "Our current forecast expects industrial production to rise by 4.3% year-on-year in 2021." (Reporting by Alexander Marrow; Editing by Catherine Evans)
