Support The Moscow Times!

Russian Manufacturing Slows for 8th Month Straight

Manufacturing accounts for around 16 percent of the Russian economy.

Russian manufacturing activity slowed in June for the eighth consecutive month, hurt by the crisis in Ukraine, a business survey showed Tuesday.

The HSBC purchasing managers' index, or PMI, edged up to 49.1 last month from 48.9 in May, but remained below the 50.0 mark that separates expansion from contraction.

New orders fell for the sixth time in the last seven months, suggesting output growth may not be sustained in July either, HSBC said in a statement.

"Geopolitics must have taken its toll on the performance of Russian manufacturing in June," said Artyom Biryukov, economist for Russia and the CIS at HSBC.

"It is probably the best explanation of a sharp decline in new export orders amid a simultaneous improvement of PMI data in China. Actually, the respondents linked weaker demand to economic uncertainty and the freezing of clients' projects," he said.

Ukraine banned defense technology and hardware exports to Russia in June.

"Ukrainian enterprises must have reduced their demand for intermediate Russian goods used for assembling defense hardware," Biryukov said.

Manufacturing accounts for around 16 percent of the Russian economy. Employment in the sector fell for the 12th month in a row, the survey showed.

"On the positive side, inflationary pressures eased in June as the pass-through effect of the ruble depreciation in the beginning of 2014 was almost exhausted," Biryukov said.

See also:

Russia to Reduce Ukrainian Defense Imports 95% by 2015

… we have a small favor to ask.

As you may have heard, The Moscow Times, an independent news source for over 30 years, has been unjustly branded as a "foreign agent" by the Russian government. This blatant attempt to silence our voice is a direct assault on the integrity of journalism and the values we hold dear.

We, the journalists of The Moscow Times, refuse to be silenced. Our commitment to providing accurate and unbiased reporting on Russia remains unshaken. But we need your help to continue our critical mission.

Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just 2. It's quick to set up, and you can be confident that you're making a significant impact every month by supporting open, independent journalism. Thank you.


Read more