By Andrei Skvarsky.
According to Deutsche Boerse-owned intelligence firm MNI, business sentiment among Russian companies has been predominantly negative since September and edged further down in October as the ruble has kept depreciating.
The availability of new orders has hit the lowest point for nearly a year, and companies’ hiring activity was at its lowest since January, MNI Indicators, a London-based unit of MNI, said in reporting the latest of its monthly polls of executives at around 200 companies in Russia’s manufacturing, services, construction and agriculture.
At the same time, firms increased output in October to the highest point since June, and, while Ukraine-related Western economic sanctions against Russia have put constraints on businesses’ ability to raise capital in the West, loans overall appeared easier to obtain.
MNI Indicators’ polls underlie diffusion indicators which are calculated by adding the percentage of respondents giving positive answers to half the percentage of those reporting no change. An indicator reading above 50 shows expansion or improvement, one reading below 50 indicates contraction or deterioration, and a result of 50 means no change.
October’s MNI Russia Business Indicator was 46.7 compared with September’s index of 47.5.
The indicator for August recorded a decline though sentiment was all in all positive while the indicators for July and June showed increases.
“This was the first survey following the imposition of additional EU and US sanctions against Russian state-owned oil companies which, in combination with the recent slide in global oil prices, has had a clear negative impact on business sentiment,” the report quoted MNI Indicators chief economist Philip Uglow as saying.
“With inflation reaching a three year high and the rouble weaker than it has ever been before, there is now every likelihood that the central bank will have to tighten policy further which will do little to help growth.”
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