Wednesday, March 4, 2015

4/3/15: Russian Services and Composite PMIs signal continued deterioration in the economy

Services PMI for Russia for February 2015 came in at a disappointing - nay disastrous - 41.3 down from January 43.9 and marking the fifth consecutive month of contraction. 3mo average through February is now at 43.7 which is much worse than already poor 3mo average through November 2014 (47.5) and is down massively on 3mo average through February 2014 (51.5). February reading is the lowest in 71 months.

Composite PMI came in at 44.7 - marking a sharp contraction in the economy, down from 45.6 in January 2015. February was the 5th consecutive monthly sub-50 reading and  the lowest for 69 months. 3mo average for Composite indicator is at 45.8, which is down on 3mo average through November 2014 (49.2) and sharply down on 3mo average through February 2014 (50.8).

Chart above shows continued downward trend in all three series since around October 2012, preceded by a weak growth trend from the point of recovery after the Global Financial Crisis in and around Q4 2009 through Q3 2012. The current sub-trend of accelerated decline in composite and services PMIs (August 2014-present) is, dynamically, very similar to the sub-trend over October 2013-May 2014 and similar, again to the sub-trend over January 2013 through July 2013. Dynamically, all indication are that over the next 4-6 months we will see both services and composite indicators hitting mid-30s and manufacturing PMI falling toward high 30s, as consistent with the economic contraction rate closer to 4-5 percent over the year.

Note: Russian manufacturing PMIs were covered here:

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