Russia's manufacturing growth hits 18-month high, PMI shows

MOSCOW, Aug 3 (Reuters) - Russia's manufacturing sector expanded at its quickest pace in 18 months in July as stronger domestic demand lifted output and new orders, a business survey showed on Monday.

The S&P Global Russia Manufacturing Purchasing Managers' Index (PMI) rose to 50.7 in July from 50.3 in June, a survey by S&P Global showed. The 50-mark separates growth from contraction.

Output rose for a third straight month in July, with the pace of expansion quickening to its fastest since January 2025. New orders also increased for a second month and at the quickest rate since May 2025.

Foreign demand remained weak, however. New export orders fell sharply again and at the fastest pace since October 2022, while firms said lower customer demand in key international markets weighed on sales from abroad.

Employment fell again as manufacturers did not replace voluntary leavers, although the pace of job shedding eased to the softest in four months. Backlogs of work declined for an 18th successive month as firms reported sufficient capacity.

Price pressures intensified. Input cost inflation accelerated to its fastest since January 2026, driven by fuel shortages, transport issues and higher supplier prices, while output charge inflation was the strongest in six months.

The survey also pointed to strains in supply chains, with supplier delivery times lengthening by the most since February 2025. Business confidence sank to its lowest since May 2020 as firms cited customer uncertainty and greater competition.

(Reporting by Gleb Bryanski; Editing by Toby Chopra)