Russian factories saw output and new orders fall again in May, leading to some job losses, according to a survey of purchasing managers released by data firm S&P Global on Wednesday.
The survey of 250 manufacturing companies suggests Russia’s invasion of Ukraine, and the Western sanctions imposed in response, continues to take a toll on the country’s economy.
However, there were some signs of stabilization after the initial shock of the invasion, with business confidence rebounding slightly and factories reporting the smallest increase in the prices they charge since June 2020.
S&P said its Purchasing Managers Index for Russia’s manufacturing sector rose to 50.8 in May from 48.2 in April. A reading above 50.0 points to an increase in activity, but the May measure is deceptive.
Usually, the longer waiting times reported by manufacturers to get supplies would point to increasing levels of activity in the sector, but in Russia’s case they instead point to the imposition of sanctions.
“Longer lead times, ordinarily a sign of improving demand conditions but driven by sanctions and logistics delays here, also contributed positively to the latest index reading,” S&P Global said.
The survey’s measure of current output continued to point to a decline, albeit at a slower pace than in April, while new orders and employment also fell. While input costs continued to rise, they did so at a slower pace than in recent months.