RTTNews - Russia's manufacturing sector continued to improve in August, a report by the VTB Capital said on Tuesday.

The Manufacturing Purchasing Managers' Index or PMI increased to a 11-month high of 49.6 in August from 48.4 in July. But it was still below the neutral 50.0 mark.

A reading above 50 indicates expansion, while a reading below 50 signals a contraction.

The output and new orders posted 51.6 and 51.4, respectively in August. The expansion of output was the first time since September 2008.

The input prices index rose to 61.3 in August from 56.5 in July, while the output prices index rose to 51.3 from 50.3 in July.

Dmitri Fedotkin, economist at VTB Capital said, The accelerating rise in input costs, stemming from high commodity prices, is worrisome as it puts pressure on the struggling manufacturing sector which, due to high competition and weak demand, cannot pass on costs to end-consumers.

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