The latest survey showed that business sentiment in Russia rose for the fourth consecutive month, to the highest level since May 2013.
The MNI Russia Business Sentiment Indicator jumped 21.7% to 61.8 in May from 50.8 in April. Sentiment is now up 49.6% since the start of the year and comfortably above the series average of 51.4, suggesting growing business confidence as the economy begins to improve.
For the first time since last October, more firms were optimistic, rather than pessimistic, regarding the business environment over the next three months. The Future Expectations Indicator rose 18% to 55.1 in May, from 46.7 in April. This is the highest reading since October 2015 and above the series average of 53.0.
Production increased to 57.5 from 49.5 last month, a high last seen in February 2014, with output up across manufacturing, services and construction. Future expected output was also on the rise, passing the 50-mark for the first time since July 2015.
New Orders rose 13.6% to 56.8 from 50.0 in the previous month. In addition, the majority of firms reported a fall in their level of stocks, with the Inventories Indicator declining 8.2% to 45.9 from 50.0 previously, in what appears to be due to increased demand in contrast to recent history.
Panellists were less pessimistic over the impact of the rouble on their business operations. The Effect of Rouble Exchange Rate Indicator increased 9.1% in May to sit just under the breakeven point at 49.0.
Inflationary pressures picked up in May with both Input Prices and Prices Received climbing 8.6% and 6% to 54.3 and 53.3 respectively.
Firms reported better access to credit as well as better financial health, as both the Availability of Credit and Financial Position Indicators rose to highs not seen since 2014.
Commenting on the latest survey, Philip Uglow, Chief Economist of MNI Indicators said, “Following on from an already impressive recovery in recent months, the sharp rise in Russian business sentiment in May provides more evidence that the Russian economy has turned the corner. Both headline sentiment and production are now back to levels not seen since sanctions were imposed in early 2014.”
