Russia’s manufacturing upturn continued to strengthen in December, rising to 69-month high in December. The improvement in the sector’s health was driven by substantial increases in production and new orders, while job creation was at its quickest since March 2011. However, goods producers continued to reduce their inventory holdings while backlogs of work broadly stabilized.

The seasonally adjusted Markit Russia Manufacturing Purchasing Managers’ Index (PMI) rose to a 69-month high of 53.7 in December. Up fractionally from November’s 53.6, the latest reading thereby signalled a solid improvement in operating conditions in Russia’s manufacturing sector. Moreover, the average PMI for the fourth quarter (53.2) was the strongest for over five-and-half years.

Russian goods producers raised their production at a substantial pace during December. Although the rate of increase eased slightly from November’s 68-month high, it continued to outstrip the historical average. At the sub-sector level, the sharpest rate of output growth was seen at investment goods firms.

The rise in total new work was restricted to the domestic market, as firms reported a fall in new business from abroad. However, the rate of decline in new export orders was the slowest in 40 months and only slight overall.

Further, the rate at which input buying rose was unchanged from November’s 68-month high, with firms attributing this to stronger output growth. Also, Russian goods producers continued to report a fall in their pre- and post- production inventories during December. However, the respective rates of decline eased since the previous month.

Meanwhile, the USD/RUB traded at 60.20, down -0.21 percent at 7:10GMT.