Wage arrears rose 10.8 percent in May as manufacturing contracted at a record pace, the State Statistics Service said Wednesday.

Total unpaid wages rose to 8.78 billion rubles ($282 million) on June 1 after falling for the first time in four months in April. Half a million people were affected by the delayed payments, with 49 percent of the money overdue coming from manufacturing businesses, the statement said.

Industrial production slid an annual 17.1 percent in May, the seventh consecutive decrease, as the government's 3 trillion ruble ($96 billion) stimulus package failed to boost orders during the country's worst economic crisis in a decade.

Seasonally adjusted output reached the bottom in January and has since been showing a slight recovery even as the last two months saw record annual drops in industrial production, Yevgeny Gavrilenkov, chief economist at Troika Dialog, said in a report Wednesday.

Output last month declined at a record pace, sliding an annual 17.1 percent for the seventh consecutive decrease. Production in May decreased 2.1 percent in the month, compared with a drop in April of 8.1 percent in the month. Even as the economy recovers, Russia's "growth will be much more moderate and balanced" after 10 years of expansion averaging almost 7 percent annually, Gavrilenkov wrote.