In March, the Russian manufacturing sector turned in a remarkably strong performance, with business activity expanding at its fastest pace in 17 years. The news, initially reported by Interfax, signaled a clear acceleration across the manufacturing landscape and set a positive tone for the quarter. S&P Global’s sector PMI climbed to 55.7 from 54.7 in February, representing the sharpest improvement in operating conditions since August 2006. This surge reflected a broad-based upturn that encompassed orders, production, and overall sentiment within the industry. — Interfax via S&P Global PMI
Leading indicators confirmed broad momentum across the sector. New orders rose at the fastest rate since January 2008, driven by robust client demand, effective marketing efforts, and an influx of new customers. Industrial production also advanced at its quickest pace since the start of 2017, underscoring a sustained expansion in output and the capacity to meet growing demand. The combination of stronger demand and improved efficiency helped factories operate with greater vigor, contributing to a favorable outlook for the near term. — Interfax via S&P Global PMI
Exports entered a fresh phase of growth in March, as new export orders increased again for the first time in four months, albeit modestly. The uptick represented the fastest expansion in export activity since August 2023, highlighting renewed interest from overseas buyers and the improving global demand for Russian manufactured goods. This development reinforced the sense that the export sector could bolster overall production in the months ahead. — Interfax via S&P Global PMI
Responding to rising production needs, firms boosted employment at a brisk pace, reaching the highest rate observed in 23 years. The labor market adjustments reflected a willingness to add skilled and semi-skilled roles to support growing output. At the same time, capacity reductions in some firms led to a rise in unfinished orders for the first time in five months, signaling that some companies faced bottlenecks in meeting the surge in demand. This dynamic pointed to the need for careful balancing of capacity and demand going forward. — Interfax via S&P Global PMI
Price dynamics shifted as cost pressures eased in March. The rate of input cost growth slowed to its second-lowest level in a year, and while firms continued to pass some cost increases to customers, selling prices rose at the most gradual pace seen since June 2023. This easing of cost pressures helped sustain consumer confidence and supported firms in maintaining competitive pricing amid steady demand. — Interfax via S&P Global PMI
Optimism within the sector climbed to a five-year high as manufacturers planned investments in new production lines and equipment. This forward-looking stance suggested that firms anticipated continued growth and were prepared to deploy capital to expand capacity and improve efficiency, even as macro conditions evolved. The combination of higher orders, rising employment, and strategic investments painted a positive picture for manufacturing activity in the months ahead. — Interfax via S&P Global PMI
Meanwhile, across Asia, China’s PMI index maintained an upward trajectory with growth extending into a fifth consecutive month. The persistence of expansion in China provided a backdrop of global demand activity that complemented the improving conditions in Russia’s manufacturing sector. — Interfax via S&P Global PMI
Looking at the broader context, Russia’s performance occurred against a backdrop of GDP growth showing resilience relative to several major economies. The comparison suggested a continued strength in Russia’s production base, supported by favorable demand conditions and strategic industry investments. As the sector moved forward, the combination of rising orders, upgraded capacity, and measured price increases contributed to a cautiously optimistic outlook for manufacturing in the near term. — Interfax via S&P Global PMI