“Stocks of unsold goods declined which, combined with a sluggish contraction of the new business sub-index, suggest that the headline index may keep rising into the second quarter,” Dmitri Fedotkin, a VTB economist, said in the statement. Still, “no sharp recovery” in the index is to be expected.
The index showed contraction for the eighth straight month, a longer period of decline than the one registered in 1998, when the government devalued the ruble and defaulted on $40 billion of debt.
The manufacturing workforce shed jobs for the 11th month in a row, the longest period of contraction in the survey’s history, VTB said. “Firms reported that the redundancies resulted from lower workloads and the subsequent need to cut spare capacity,” it said in the statement.
OAO Severstal, Russia’s biggest steelmaker, plans to cut as many as 9,500 jobs at its Russian units, Chief Executive Officer Alexei Mordashov said on March 11. The metals industry as a whole could cut as many as 60,000 jobs this year, or 5 percent of the workforce as demand and prices slump, the Industry and trade Ministry said.