Russia’s manufacturing sector continued to contract in November, marking the sixth consecutive month of decline, as output levels fell at the fastest pace since April 2022 and new orders continued to weaken, S&P Global reported on November 28. (chart)

The seasonally adjusted S&P Global Russia Manufacturing Purchasing Managers’ Index (PMI) rose slightly to 48.3 in November from 48.0 in October. Although this suggests a marginal slowdown in the rate of contraction, the reading remains below the neutral 50.0 mark, indicating worsening operating conditions.

“November saw a further deterioration in operating conditions in the Russian manufacturing sector,” S&P Global stated. “The downturn stemmed from a sharper drop in output and continued reduction in new orders.”

The fall in production was described as sharp and the steepest in over a year and a half, with companies citing subdued demand and persistent supply chain disruptions as the primary causes. Supplier delivery times lengthened to the greatest extent in nine months, largely due to raw material shortages and logistical delays.

Export demand also remained weak. “Dragging on the overall decline in new orders was a renewed contraction in new export sales in November. The fall was solid amid muted client demand in existing markets,” S&P Global said.

Despite the broad-based slowdown, employment in the manufacturing sector returned to growth, with firms marginally increasing staffing levels for the first time since mid-year. The pace of job creation was the fastest since July 2024 and reportedly driven by the filling of long-standing vacancies.

A reduction in new orders enabled manufacturers to clear outstanding work more rapidly. Backlogs of work fell for the tenth consecutive month, with the rate of depletion accelerating to its quickest since July. At the same time, firms cut back on purchasing activity, leading to a further drop in input stocks, while post-production inventories rose due to excess output being moved into storage.

Cost pressures also intensified. “Higher cost burdens were commonly attributed to greater utility and raw material prices,” S&P Global noted. Input cost inflation reached its highest level since May, prompting manufacturers to raise selling prices. “November data indicated a solid rise in output charges at Russian goods producers... the rate of charge inflation was the quickest since March.”

Business confidence edged higher from October’s recent low, supported by plans for investment in new products and hopes for demand recovery. However, optimism remained muted overall. “The level of optimism was the second-lowest in over three years (ahead of October 2025),” S&P Global concluded.