The latest IHS Markit Russia Business Outlook survey indicates stronger optimism among private sector firms in Russia, with all net balances rising to in October.
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The activity net balance (+25%) is slightly below the global average (+28%), but above the trend for emerging markets (+22%) and at its highest mark for one year.
Business confidence is boosted by forecasts of greater client demand, access to new markets, product development and planned investments in business expansion.
Robust predictions towards future output are centred on the service sector, however, with manufacturing firms noting the weakest degree of optimism since October 2016.
Service providers are at their most upbeat in a year.
Nonetheless, both manufacturing and service sector firms foresee a need for larger workforces over the coming year.
Notably, the net balance of service providers expecting a rise in employment is the highest since February 2012.
Meanwhile, private sector firms in Russia expect inflationary pressures to intensify over the next year.
The net balance of firms predicting higher input prices is the highest since June 2013.
At the same time, a larger proportion of panellists foresee a rise in output charges.
The net balance is up to its highest since February 2015.
Russian manufacturers and service providers predict job creation over the coming year, with the proportion of optimists less pessimists the highest seen since October 2012.
Hiring intentions are stronger among services firms than at their manufacturing counterparts.
Private sector firms forecast a rise in investment over the next 12 months, with the net balance of firms expecting an increase in capex rising from that seen in June.
Although below the emerging market average, the net balance is in line with the global figure.
Russian companies have revised higher their expectations for input prices over the coming year, with the net balance up to its highest since June 2013.
Although service sector firms’ net balance is equal to that seen in June, the net balance of manufacturing firms forecasting a rise is the highest since February 2015.
Similarly, there is a marked rise in the net balance of panellists expecting an increase in output prices.
The net balance has risen from June to the highest in over three-and-a-half years.
Mirroring the trend for input prices, charge inflation is set to be stronger at manufacturers than at their service sector counterparts. ■