Overview of macro parameters

Purchasing Managers’ Index (PMI)

JP Morgan Global Composite PMI, an international business activity index, remained positive from early 2022, peaking in June on the back of China’s recovery from extensive lockdowns in both industry and services. However, during the year, the values still remained below last year’s 53.5 vs 56.6 points in June 2021, due to global supply chain restructuring and market uncertainty. In 2H 2022, the global index fell below the psychological mark of 50 points, due to the cumulative effect of the energy crisis and shortages of feedstock previously supplied by Russia to various sectors of the global market.

Russia Composite PMI reached the yearly maximum of 52.2 in July. The record low was in March (37.7 points) as a reaction to the special military operation. For the year as a whole, the situation was better than with the global index, as foreign sanctions contributed to the forced strengthening of the Russian industry to ensure sufficient import substitution in the country.

JP Morgan Global Composite PMI 2022

Source: PMI TM by IHS Markit

JP Morgan Russia Composite PMI

Source: PMI TM by IHS Markit

Energy price

Source: RBC

Global energy crisis

Because of the sanctions, most EU countries refused to purchase Russian energy resources, in particular Russian gas. This caused gas and electricity prices to rise, as transition to alternative energy sources had not yet been secured. These factors directly affected the industrial sector. As electricity prices rose, so did commodity prices and, in some places, production was even halted. In Europe, for example, producers massively reduced aluminium smelting or went bankrupt because of rising energy prices. Almost 1 million facilities in Europe have already been mothballed. Europe faced a several-fold rise in firewood demand due to the energy crisis, and some countries restricted the export of pallets.