Manufacturing Sector Growth in Russia

(Reuters) – Activity in Russia’s manufacturing sector grew at its slowest pace in over a year in August, as output, new orders, and employment all eased.

The S&P Global Purchasing Managers’ Index (PMI) for Russian manufacturing fell to 52.1 in August from 53.6 in July, remaining above the 50 level that marks growth in activity, but dropping to its lowest reading in 13 months.

“Although output, new orders, and employment continued to grow, the rates of expansion slowed in each case,” S&P Global stated.

Since invading Ukraine in February 2022, Russia has significantly invested in manufacturing military equipment and weapons, helping the sector, which might have otherwise struggled due to international isolation.

New export orders, which had contracted in July, returned to expansion in August due to stronger demand from key export markets.

Output levels rose, driven by sustained client demand, but the pace of growth was the weakest in a year. New orders expanded modestly, registering the slowest growth rate since October 2022.

Employment growth eased to its slowest rate in seven months. Despite increased staffing, backlogs of work grew slightly due to logistics issues.

Confidence grew at a slower pace, with optimism stemming from planned investments, new products, and the prospect of new customers, according to the survey.