Is Russian Manufacturing Declining? PMI Drops to 48.1 in December

The Purchasing Managers' Index (PMI) for Russian manufacturing has dipped to 48.1 in December from 48.3 in November, indicating a continued contraction in the sector. This marks the seventh month of declining operating conditions, primarily driven by weak demand and a decrease in new orders. The latest PMI data reflects the ongoing struggles faced by Russian manufacturers, with output falling at its fastest rate since March 2022.

Last updated: 29 December 2025 (BST)

What’s happening now

The latest data from S&P Global reveals a concerning trend in Russia's manufacturing sector. The PMI reading of 48.1 indicates that business activity is contracting, as the index has remained below the neutral mark of 50.0 for several months. The drop in output, attributed to weak demand, reflects underlying economic challenges that manufacturers are currently facing. Companies are responding by reducing their workforce and scaling back on raw material purchases, further signalling a downturn in production.

Key takeaways

The PMI for Russian manufacturing fell to 48.1 in December, down from 48.3 in November.
This marks seven consecutive months of contraction in the sector.
Output has declined for ten months, with the fastest pace of decline recorded since March 2022.
New orders are still contracting, although at a slower pace.
Employment in the sector has decreased, with job cuts occurring in three of the last four months.

Timeline: how we got here

The following timeline highlights key events in the Russian manufacturing sector leading up to the current PMI figures:

March 2022: Output began to decline significantly, marking the start of a prolonged downturn.
November 2022: The PMI fell below 50 for the first time, indicating contraction.
February 2023: The PMI continued to show signs of decline, registering at 48.6.
December 2025: The PMI stands at 48.1, reflecting ongoing challenges in production and demand.

What’s new vs what’s known

New today/this week

The recent PMI reading for December 2025 highlights a continued decline in manufacturing, with output and new orders shrinking further. Input costs have risen sharply, leading to increased prices for customers.

What was already established

It has been known for several months that Russian manufacturers are facing significant challenges, including reduced consumer demand and external economic pressures. The ongoing contraction has been a result of these factors, compounded by geopolitical tensions and market uncertainty.

Impact for the UK

Consumers and households

While the direct impact on UK consumers may be limited, a downturn in Russian manufacturing can have ripple effects on global supply chains. Increased prices for imported goods, particularly those reliant on raw materials from Russia, could affect household expenses.

Businesses and jobs

UK businesses that rely on Russian imports may face supply chain disruptions and increased costs. The reduction in production capacity in Russia could lead to a scarcity of certain goods, affecting availability and pricing in the UK market.

Policy and regulation

The UK government continues to monitor economic indicators from Russia, as significant shifts in manufacturing output could influence trade policies and sanctions. Ongoing discussions about market regulations may arise in response to these trends.

Numbers that matter

48.1: The December PMI reading, indicating contraction.
10: Consecutive months of output decline.
7: Months of ongoing contraction in operating conditions.
March 2022: The fastest rate of output decline recorded since this month.
3: Number of months in the last four where employment has decreased.

Definitions and jargon buster

Purchasing Managers' Index (PMI): An indicator of the economic health of the manufacturing sector, where readings above 50 signal growth and below 50 indicate contraction.
Operating conditions: Refers to the overall business environment and factors affecting production and sales.
Input costs: The costs incurred by manufacturers for raw materials and other inputs required for production.
New orders: The number of orders received by manufacturers for goods that have not yet been produced.

How to think about the next steps

Near term (0–4 weeks)

In the near term, businesses should closely monitor developments in the Russian manufacturing sector for any signs of recovery or further decline. Adjustments to supply chains may be necessary if disruptions continue.

Medium term (1–6 months)

Companies should prepare for potential increases in costs and consider diversifying suppliers to mitigate risks associated with reliance on Russian manufacturing. Strategic planning will be essential to navigate any economic shifts.

Signals to watch

Upcoming PMI releases and trends in new orders.
Changes in input costs and inflation rates.
Global economic indicators that may affect trade with Russia.

Practical guidance

Do

Stay informed about economic developments in Russia.
Consider alternative suppliers to mitigate risks.
Review pricing strategies to accommodate potential cost increases.

Don’t

Ignore signs of further contraction in the manufacturing sector.
Over-rely on a single market for raw materials or goods.
Underestimate the potential impact of external economic conditions.

Checklist

Monitor PMI releases and economic forecasts.
Evaluate supply chain dependencies and risks.
Assess pricing strategies and customer communication.
Stay updated on geopolitical developments affecting trade.
Plan for potential cost increases in the near future.

Risks, caveats, and uncertainties

Data regarding the Russian manufacturing sector is subject to revision, and the economic landscape can change rapidly due to geopolitical factors. The ongoing conflict in Ukraine and related sanctions could further exacerbate the situation. It is important for businesses to approach these developments with caution, as conditions can vary significantly and are influenced by external factors.

Bottom line

The decline in the PMI for Russian manufacturing to 48.1 in December underscores the ongoing struggles within the sector. UK businesses and consumers should remain vigilant and proactive in managing supply chain dependencies while preparing for potential cost increases in the coming months.

FAQs

What does a PMI below 50 indicate?

A PMI below 50 indicates a contraction in manufacturing activity, signalling that business conditions are deteriorating in the sector.

How does the PMI affect UK businesses?

The PMI can influence UK businesses by indicating potential disruptions in supply chains and shifts in pricing due to changes in production levels in countries like Russia.

What should businesses do in response to the PMI data?

Businesses should assess their supply chain strategies, consider diversifying suppliers, and prepare for potential cost increases resulting from economic conditions reflected in the PMI data.