Production in Russia increased the most in 18 years

Domestic demand helped Russia's producer price index rise to 55.7 points last month, the highest since 2006.

S&P Global data released on April 1 showed that Russia's manufacturing industry continued to recover, when the Purchasing Managers' Index (PMI) reached over 50 points.

Accordingly, Russia's PMI in March was 55.7 points. This number is up from 54.7 in February and is the highest since August 2006.

Rising domestic demand is the reason for the revival of Russian manufacturing. Moscow has spent heavily on the manufacturing industry and poured money into the military sector to promote military service. This policy also helped industrial output in February increase stronger than expected, according to data released last week.

Workers in an automobile factory in Moscow (Russia) in November 2022. Photo: Reuters

In March, the number of new export orders also increased for the first time since October 2023. "Foreign customer demand is growing, as Russia expands into new export markets and wins new customers," S&P Global explained in the report.

This also impacts the job market. S&P Global said Russian businesses are recruiting employees at the strongest rate since November 2000. They are also increasing their purchases of input materials to rebuild inventories.

However, the business's sales still face difficulties. Logistics challenges and slow rail deliveries are the main reasons for this.

However, Russian businesses are most optimistic about output in the past 5 years. "They are confident that customer demand will continue to increase. Businesses will also invest in product lines and machinery to increase performance," S&P Global said.

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