05.06.22 Review

Summertime Optimism: May PMI Indexes Escaped "the Negative Zone" — Mainly Due to Businessmen's Hopes That Demand Would Grow

The Purchasing Managers' Index (PMI), measuring business activity in manufacturing, crossed the 50 points threshold in May (50.8), which indicates that the majority of businessmen are somewhat optimistic about the near future of the Russian economy, the seasonally adjusted S&P PMI Index data shows.

In the services sector, PMI reached 48.5 in May vs. 44.5 in April, indicating that businessmen are still feeling insecure, but somewhat improved.

The growing confidence of entrepreneurs in both sectors is based on costs reduction (primarily due to layoffs earlier in the spring) and the expected increase in consumer demand due to a slowdown of inflation in May. The results of a new entrepreneur survey conducted by the Central Bank confirm this trend.