Russia manufacturing slips again in September as demand stays weak

Russia's manufacturing sector contracted for the second month in a row in September due to weak demand, according to an S&P Global survey. The Seasonally Adjusted S&P Global Russia Manufacturing Purchasing Managers' Index (PMI) rose slightly to 49.8 from 48.8 in August, suggesting only a minor contraction. New orders fell for a second consecutive month, with manufacturers citing higher prices and increased competition as reasons for the decline.

Export orders fell at their fastest pace since May 2022, while domestic new business orders showed a slower decline. Output also contracted for a second month, although the pace of decline was less severe than in August. As a result, manufacturers reduced their workforce for the 10th straight month, with voluntary departures not being replaced.

Both input stocks and finished goods inventories declined, and operating costs rose due to higher supplier prices and unfavorable exchange rate movements. Despite the weak current conditions, manufacturers remained optimistic about output over the next year, expecting stronger demand and new customer acquisition.