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Why Russia’s Manufacturing PMI Contracted in May

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Russia’s manufacturing PMI in May 2018

According to a report by Markit Economics, the final Russia manufacturing PMI was in the contraction zone in May after showing a strong improvement in April. It was at 49.8 in May as compared to 51.3 in April. The May figure didn’t meet the preliminary market estimate of 50.5.

Russia’s manufacturing PMI in May was affected by the following factors:

  • Production volume and output improved at a slower rate in May.
  • Both factory output and new business orders also weakened during the month.
  • Export orders in the manufacturing sector rose marginally in May.
  • Employment in the manufacturing sector contracted during the month.

The announcements of import tariffs by Trump on various US trading partners is increasing uncertainty about global trade and is affecting client demand in the economy. The rising cost of raw materials is also affecting the manufacturing sector.

Performance of ETFs in May 2018

The VanEck Vectors Russia ETF (RSX), which tracks the performance of Russia, rose 0.48% in May. However, the Direxion Daily Russia Bull 3X ETF (RUSL) dropped 0.3% in that month.

In the next part of this series, we’ll analyze the performance of Russia’s services PMI in May.

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