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Russia Factory Activity Shrinks Amid Output Rise
1 Jun
Summary
- Russian factory activity contracted at the slowest pace in three months.
- Output grew for the first time in 15 months, though marginally.
- Input price inflation accelerated due to higher fuel and metal costs.
In May, Russia's factory activity experienced its slowest contraction in three months, as indicated by S&P Global's survey. The manufacturing purchasing managers' index (PMI) improved to 48.8 from 48.1 in April, though remaining below the 50-point threshold signaling contraction.
This overall downturn was exacerbated by a significant drop in new sales and a decrease in customer purchasing power. New orders fell at their fastest rate since July 2025, while new export business contracted most steeply in eight months. Conversely, factory output saw a marginal increase, marking the first growth in 15 months. However, outstanding business decreased substantially, the fastest rate in over six years.
Employment levels declined solidly in May, attributed to available capacity and reduced client demand. Input price inflation accelerated, driven by higher costs for fuel, metals, and electrical equipment. Consequently, selling price inflation quickened to its fastest pace since February 2025. Producers remained less optimistic about future conditions compared to April, concerned about customer liquidity and purchasing power.
