01.09.202606:08:10UTC+00Russia Manufacturing Returns to Contraction

Russia’s S&P Global Manufacturing PMI fell to 48.8 in August, down from July’s 18‑month high of 50.7, signaling the first contraction in the sector in three months. The downturn was driven by declines in both production and new orders, while employment and inventory levels also continued to shrink.

Output decreased for the first time since April, though only marginally, reflecting weaker inflows of new work. The modest drop in new orders was attributed to subdued client demand and reduced liquidity among customers.

Purchasing activity also declined, with firms reporting a renewed fall in input buying. Stocks of both purchases and finished goods contracted at a faster pace, and supplier delivery times lengthened by the greatest extent since December 2024, largely due to logistics disruptions and fuel shortages.

On the pricing side, inflationary pressures intensified. Both input costs and output charges rose at the fastest rate in seven months, driven by higher fuel prices and increased costs for imported goods.

Despite the weaker current conditions, business confidence improved. Firms expressed greater optimism about future output amid expectations of stronger demand and planned increases in advertising and promotional activity.