Russia’s Manufacturing Sector Contracts Further in October, PMI Shows

A survey by S&P Global released on Saturday showed a further decline in Russia’s manufacturing sector in October, as new orders fell at the fastest pace in three months.

The Purchasing Managers’ Index (PMI) for the sector slipped to 48.0 in October from 48.2 in September, marking the sharpest contraction since July. A reading below 50 indicates a decline in activity.

The downturn was driven by continued drops in output and new orders, as firms scaled back hiring and input purchases to control costs.

Business confidence also weakened to its lowest level since May 2022, reflecting concerns over the financial strain facing customers.

Despite the overall slowdown, there were signs of recovery in export markets, with new export orders rising for the first time in two months, supported by stronger demand in key markets.

Weaker metal prices helped ease cost pressures, with input costs rising at the slowest pace since February 2009. With domestic demand subdued, manufacturers cut output charges for only the second time in three years to attract new customers and retain existing ones.

Supplier delivery times improved slightly — the most significant improvement since November 2019 — as lower input demand reduced pressure on capacity.

Overall, the data highlight the persistent challenges facing Russian manufacturers, as sluggish demand and financial headwinds among customers continue to weigh on the sector’s outlook.