“Russian PMI data for the first quarter of 2014 signalled the worst business conditions for manufacturers and service providers since mid-2009,” noted Markit economist Trevor Balchin.
Markit’s Composite Purchasing Managers’ Index (PMI) for Russia fell to 47.8 in March, the lowest level since May 2009.
Any reading below 50 signals contraction in economic activity.
“The PMI data are consistent with a quarter-on-quarter decline in GDP of 0.4% in the first quarter (and zero annual growth),” added Balchin. “Moreover, forward-looking indicators from the surveys have also deteriorated sharply, so a technical recession in the first half of the year looks a distinct possibility.”
Survey respondents said the tumbling rouble had been adding to their costs, sending input inflation to the highest level in three years.
Balchin noted that this is in contrast to neighbouring economies like Poland, the Czech Republic, and the eurozone where growth has been picking up.