Russian manufacturing returns to growth for first time in over a year, PMI shows

MOSCOW, July 1 (Reuters) - Russia's manufacturing sector returned to growth in June for the first time in just over a year as output rose at its fastest pace since January 2025 and new orders stabilised, a business survey showed on Wednesday.

The S&P Global Russia Manufacturing Purchasing Managers' Index (PMI) rose to 50.3 in June from 48.8 in May. The 50 mark separates growth from contraction.

Output expanded for a second straight month, with the pace of growth quickening fractionally to its fastest since January 2025. New orders stabilised after 12 straight months of decline.

Export demand remained weak. New export orders fell for an eighth consecutive month and at the sharpest rate since September 2025, with firms citing weak overseas markets, unfavourable exchange rate moves and competition.

Manufacturers cut jobs for a seventh month, saying voluntary leavers were not replaced amid spare capacity. Backlogs of work fell for a 17th consecutive month, though the pace of decline softened markedly from May's recent record.

Input cost and output price inflation both slowed slightly from May, while vendor delivery times lengthened to the greatest extent since January amid logistics disruptions and import challenges linked to the conflict in the Middle East.

Firms increased purchasing activity for a second month and built stocks of inputs at the fastest pace since February 2023 in anticipation of stronger orders ahead. On the other hand, confidence about the next 12 months inched down to a three-month low and stayed below the series average.

(Reporting by Gleb Bryanski; Editing by Hugh Lawson)