MOSCOW, (Reuters) - Russian manufacturing kept expanding slowly in August, a survey showed on Monday, suggesting the sector is holding up despite concerns about the economic impact of the Ukraine crisis.
The HSBC purchasing managers’ index for manufacturing, which accounts for around 16 percent of the Russian economy, held steady at 51.0, above the 50.0 mark that separates expansion from contraction.
Output increased for the third move running, having declined for the previous five months, and new orders expanded at the fastest rate since October 2013. However, employment declined for the 14th straight month.
“The Russian manufacturing sector held up well in August, continuing its slow expansion,” said Alexander Morozov, chief economist for Russia and CIS at HSBC.
He said local demand was the sole reason for the increase as new export orders have declined steadily for a year.
“The consumer goods sector was a clear outperformer, reporting not just output growth, but also a strong rise in new work, a rise in new export orders, and an increase in outstanding business,” he said.
Morozov said that the rise in consumer-related manufacturing sectors was the result of import substitution, but that the long-term effects would be negative for the economy, leading to higher costs and prices.
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Reporting By Jason Bush; Editing by Hugh Lawson