Russia's manufacturing decline narrowed in February, PMI data shows

Investing.com – According to the latest S&P Global Russia Manufacturing PMI data released on Monday, Russia’s manufacturing sector continued to contract in February, but the rate of decline slowed for the second consecutive month.

The seasonally adjusted S&P Global Russia Manufacturing Purchasing Managers’ Index rose from 49.4 in January to 49.5 in February, marking the ninth consecutive month below the 50.0 growth threshold.

This reading indicates the slowest deterioration during the current nine-month contraction period.

Production levels declined again this month, continuing a 12-month decline, but the decrease was only marginal and the slowest in that period.

While output slightly decreased, new orders remained roughly flat compared to the previous month, ending an eight-month streak of contraction.

Despite weak demand, some companies reported increased customer interest. However, due to the still-weak international sales environment, new export orders declined at a faster pace.

Employment among Russian manufacturers fell for the third consecutive month in February. As companies chose not to replace voluntary leavers for cost and capacity reasons, layoffs accelerated to the fastest rate since June 2025.

Backlogs of work decreased for the thirteenth consecutive month, with the rate of depletion accelerating but remaining moderate. The pace of input procurement contraction quickened to the fastest in four months, as companies reportedly used inventories to fulfill new orders.

In February, both procurement and finished goods inventories declined, but the contraction slowed somewhat amid signs of demand rebounding.

In terms of prices, inflation rates for input costs and output prices slowed significantly from January, falling below their respective series averages. This cooling followed a sharp rise in January due to VAT increases.

Companies reported that rising fuel and raw material prices were passed on to customers through higher factory gate prices.

Business confidence regarding the outlook for output fell to one of the lowest levels in three and a half years.

Reportedly, challenging business conditions put pressure on sentiment, but overall optimism remained due to investments in new facilities and technologies, as well as hopes for stronger demand.

Supplier performance further deteriorated this month, with delivery times for inputs extending for the fourth consecutive month, though the extent of delays was less severe than before.

Respondents indicated that difficulties in sourcing new suppliers and logistical delays contributed to longer input delivery times.

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