Russia's manufacturing contraction accelerates to its fastest pace this year

Investing.com – Russia’s March manufacturing conditions deteriorated: the S&P Global Russia Manufacturing Purchasing Managers’ Index fell from 49.5 in February to 48.3, marking the sharpest contraction since the start of 2026.

Output declined at a solid pace, posting the fastest drop in three months. Manufacturers said customer purchasing power weakened and competition intensified. New orders fell for yet another month, with the decline accelerating to the fastest pace since October.

Purchases of inputs fell at the fastest rate in four years, as companies adjusted based on lower production demand and cost considerations. Russian manufacturers also cut headcount for a fourth consecutive month, despite the fact that the pace of layoffs was the slowest so far this year.

Inventories fell as companies drew down finished-goods stock and purchased supplies to fulfill orders. Backlogged work declined at the fastest rate in three months.

Input costs rose at the second-fastest pace in more than a year, driven by higher fuel and vendor costs. However, output prices inflation slowed to a marginal pace, as firms faced competitive pressure and sought to support sales.

Business confidence dropped to the lowest level since April 2022. Manufacturers cited weak demand conditions and concerns about customers’ ability to pay. Optimism declined for a second month in a row.

Supplier delivery times lengthened slightly due to disruptions to logistics routes, though the degree of deterioration in supplier performance was limited by reduced input demand.

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