Russia manufacturing contracts at fastest pace this year

Investing.com -- Russian manufacturing conditions deteriorated in March, with the S&P Global Russia Manufacturing Purchasing Managers’ Index falling to 48.3 from 49.5 in February, marking the sharpest contraction in 2026.

Output declined at a solid pace, the fastest in three months, as manufacturers reported reduced purchasing power among customers and increased competition. New orders fell for another month, with the rate of decline accelerating to the quickest since October.

Input buying dropped at the steepest rate in four years as firms adjusted to lower production requirements and cost considerations. Russian manufacturers also reduced workforce numbers for the fourth consecutive month, though the pace of employment cuts was the slowest this year.

Inventory levels declined as companies depleted stocks of finished goods and purchases to fulfill orders. Backlogs of work fell at the fastest pace in three months.

Input costs rose at the second-fastest rate in over a year, driven by higher fuel and supplier costs. However, output price inflation slowed to a marginal rate as firms faced competitive pressures and sought to drive sales.

Business confidence dropped to the lowest level since April 2022, with manufacturers citing subdued demand conditions and concerns about customer solvency. The degree of optimism fell for the second month in a row.

Supplier delivery times lengthened marginally due to disruptions to logistics routes, though the deterioration in vendor performance was limited by lower demand for inputs.

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