Russian Manufacturing Returns to Growth for First Time in Over a Year

Russia's manufacturing sector returned to growth in June for the first time in just over a year, as output rose at its fastest pace since January 2025 and new orders stabilized. The S&P Global Russia Manufacturing Purchasing Managers' Index (PMI) rose to 50.3 in June from 48.8 in May, with the 50-point mark separating growth from contraction.

Output expanded for a second straight month, with the pace of growth quickening slightly to its fastest since January 2025. New orders stabilized after 12 consecutive months of decline. However, export demand remained weak. New export orders fell for an eighth consecutive month, the sharpest rate since September 2025, with firms citing weak overseas markets, unfavorable exchange rate movements, and competition.

Manufacturers cut jobs for a seventh month, as voluntary leavers were not replaced amid spare capacity. Backlogs of work fell for a 17th consecutive month, although the pace of decline softened markedly from May's recent record. Input cost and output price inflation both slowed slightly from May. Vendor delivery times lengthened to the greatest extent since January, due to logistics disruptions and import challenges linked to the conflict in the Middle East.

Firms increased purchasing activity for a second month and built stocks of inputs at the fastest pace since February 2023 in anticipation of stronger orders ahead. On the other hand, confidence about the next 12 months edged down to a three-month low and remained below the series average.