Russian Manufacturing

This in Bloomberg this morning:

Russian Manufacturing

Russian manufacturing growth slowed in June for the first time since February as the pace of output and new orders declined, a gauge of production showed.

VTB Bank Europe's Purchasing Managers' Index declined to 53 from 54.4 in May, when manufacturing expanded at the fastest pace in nine months, the bank said in an e-mailed statement today. A figure above 50 indicates growth, below 50 a contraction. The bank surveyed 300 purchasing executives among Russian manufacturers.

``The decline in the headline index primarily reflected weaker gains in new orders, output and manufacturing employment during June,'' VTB said in the statement.

The pace of new orders growth had the biggest decline since January 2002, driven by a drop in export orders, the statement said. Job creation also expanded at the slowest pace in the past six month.

Russia, the world's largest energy exporter, aims to make its economy less dependent on oil and gas sales by boosting manufacturing and other industries not based on commodities. The nation's $1 trillion economy will probably expand 7 percent this year, government officials have said.

``Output growth moderated from May's nine-month high in June but was still sharper than at any other period in the first half of 2007,'' the statement said.

The data suggests that ``companies continued to absorb more costs without passing them on to final consumers,'' Chris Green, senior economist at VTB, said in the statement.

Input price inflation accelerated for the third-consecutive month in June on metals, construction materials and energy prices, as average input costs rose at the fastest pace since October 2004. Output prices continued to increase at a ``market rate,'' which weakened slightly since May, the statement said.

Russian producer price growth accelerated in May to an annual 10.7 percent, the fastest pace in three months. The pace of factory-gate price growth accelerated from 7.6 percent in April, according to the Federal Statistics Service.