Manufacturing Sector Posts Healthy Growth

Moscow Times ^ | 2 April 03

[Stavka2]

Manufacturing continued an upturn in March, led by a growth in new orders and stronger output, suggesting the economy was on track to again expand over 4 percent this year, Moscow Narodny Bank said Tuesday.

The Manufacturing Purchasing Managers' Index, based on a poll of 300 purchasing managers, rose to a seasonally adjusted 51.3 in March, its highest level in five months.

The index is designed to give a snapshot of manufacturing conditions. A reading above 50, which is considered a no-change mark, indicates a rise on the previous month.

The index firmed marginally to 50.3 in February from 49.1 in January when the manufacturing sector's growth faltered for the first time in more than four years.

"While this is largely derived from robust global energy prices, at 51.3, the current level is indicative of annual real GDP growth again in excess of 4 percent," Paul Forrest, a group economist at MNB, said in a statement.

Russia, the world's second largest crude exporter, had been aiming for 3.5 percent to 4.4 percent growth in 2003 depending on global crude prices but after a strong start officials raised their forecast to 4.5 percent for the year. Russia's economy rose 4.3 percent in 2002.

The bank attributed the rise in March PMI to new order book growth that rose at its fastest pace for seven months, buoyed by improved domestic conditions. New export orders were also reported to have risen at a faster rate than in February.

As order levels accelerated for a second straight month, firms responded by increasing production at their plants in March.

"A number of panelists added that, apart from the rise in new order levels, new product developments had also contributed to the upturn in output growth," the bank said.

The bank said that input price inflation accelerated for a third straight month in March to the fastest since October 2000, fuelled by rising utility and energy prices as well as increasing costs of imports from the eurozone.

The survey also unveiled further manufacturing job losses in March with the workforce contracting for the seventh consecutive month.

[First_Salute]

Know anything about pickup truck manufacturing plant in Russia?

[Stavka2]

Well, I do know about a Jeep plant south of St. Petersburg, biggest in E. Europe and a new Volvo plant that just openned. From what I've seen, pickup trucks are more or less an American thing...past the farm use.

[First_Salute]

Pickup trucks catch my eye in the many pics from around the world. Obviously Nissan and Toyota are top sellers. Seems to me that a Toyota joint venture with a Russian firm, as well as Ford-Volvo in competition, could do very well in Russia. Costs should be lower, and the plants' employees' work skills, excellent.

It's just a hunch, but I think that would bring in more investment.

I'd bet that the Japanese would like to have such a partnership, and some Russian companies would like to have a greater presence of large-scale high-quality "fit and finish" manufacturing facilities upon which to train and build more.

[Stavka2]

I think its starting to happen. Japan had a complex because officially it and Russia...via the Soviet Union...are still at war...no peace from WW2 just another armestice. But with the threat of China getting the oil pipeline that Japan desperately needs, here comes the Japanese investment firms. They might be inflexable at times but the Japanes are not dumb.

[Stavka2]

Lockheedmartin and a few Russian firms are also working on airframes to compete with Airbus.

[First_Salute]

Interesting stuff; thanks.