"Russian Manufacturing Activity Sees Sharpest Decline Since Early Months of Ukraine Invasion", 1 July 2025

Business activity in Russia’s manufacturing sector registered its most significant drop since the early months of the full-scale invasion of Ukraine, according to new data released by S&P Global.

The Purchasing Managers’ Index (PMI) for Russian manufacturing sank to 47.5, down from 50.2 in May.

Any reading below 50 indicates a contraction.

The decline not only pushed the index into negative territory, but also marked the steepest monthly drop since March 2022, when Russia was in the early phases of its full-scale war and the West hit Moscow with sweeping sanctions...

S&P Global called the fall in orders “sustained” and noted that export demand in particular saw its sharpest drop since March 2022, partly due to the high value of the ruble...

Surveyed firms cited weak demand and reduced purchasing power among customers as key drivers. On the upside, reduced production and order volumes helped companies clear backlogs more quickly...

Labor shortages were the second most frequently cited concern in the Central Bank’s June surveys, mentioned by 22% of respondents.

Despite the worsening economic indicators, official unemployment remains near record lows. The jobless rate stood at just 2.3% in April, according to the most recent government data.

Still, June saw the sharpest reduction in factory employment since April 2022, as companies adjusted staffing levels in response to dwindling orders, according to S&P Global. With layoffs accelerating and forward-looking indicators softening, Russian industry appears to be facing growing pressure from both domestic and external forces.